Bangalore District Court
State By : Cbi/Acb/Bengaluru vs Sri Radhakrishna Shetty on 5 November, 2015
IN THE COURT OF THE XLVIII ADDITIONAL
CITY CIVIL AND SESSIONS JUDGE (SPECIAL COURT
FOR TRIAL OF CBI CASES), BENGALURU(CCH-49).
Dated this the 05th day of November, 2015
PRESENT : Sri. SHIVANNA, B.Com., M.A., LL.B,
XLVIII Addl. City Civil & Sessions Judge
(Special Court for Trial of CBI Cases),
Bengaluru (CCH-49).
SPECIAL C.C.No.5/2010
COMPLAINANT: State by : CBI/ACB/Bengaluru
(By : Public Prosecutor)
Vs
ACCUSED : 1. Sri Radhakrishna Shetty,
S/o. Sri A. Narsu Shetty,
58 years,
No.841, Ground Floor,
6th C Cross, 17th F Main,
Near Koramangala Club,
Koramangala 6th Block,
Bengaluru.
2. Sri. Mithun Narayan @ Mithun
Sathyanarayana @ M.S.Narayan,
S/o. Sri Sathyanarayana,
31 years,
Flat No.S-5,
Kaveri Residency,
No.25, 3rd Floor, 16th Main,
20th Cross, BTM II Stage,
Bengaluru -76.
3. Sri Ramaiah Setty,
S/o. Sri Narayana Setty,
63 years,
2 Spl.C.C.No.5/2010
4. Sri Vinay K.R.
S/o. Sri Ramaiah Setty,
30 years,
A3 & A4 are R/o No.3,
Old 10/2, IV-A, I Floor, 25th Main,
Girinagar T Block,
Banasankari Stage III, Bengaluru.
5. Smt Greeshma H.G.
W/o. Sri Srinivas,
33 years,
R/o. No.26, Gopal Reddy Building,
Carmelaram Post, Sarjapur Road,
Alaknaykanahalli, Bengaluru.
(A.1 by Sri Kiran S. Javali, Advocate
A.2 by Sri. V.G.B., Advocate)
JUDGMENT
The Inspector of Police, CBI-ACB, Bengaluru, has filed the charge-sheet against accused Nos.1 to 5 for the offences punishable under Section 120-B read with Sections 409, 420, 468 and 471 of IPC and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 (hereinafter referred to as the 'PC Act').
2. The case of the prosecution is as follows:-
(a) Accused No.1-Sri. Radhakrishna Shetty was working as Branch Head of Vijaya Bank, Koramangala Branch, Bengaluru, during the period from 03.02.2007 to 3 Spl.C.C.No.5/2010 23.08.2008. He had entered into criminal conspiracy with accused No.2-Sri. Mithun Narayan, Managing Director, M/s. Stratycon Technologies Pvt. Ltd., No.2, 1st Floor, H.B. Complex, BTM 1st Stage, BTM Ring Road, Bengaluru (which is a company registered under the Companies Act, 1956), and accused No.3-Ramaiah Setty, Director of the said company, and others in the matter of sanction and disbursal of various credit facilities in the name of said company-M/s. Stratycon Technologies Pvt.
Ltd. In furtherance of the said conspiracy, accused No.1 had sanctioned Cash Credit (miscellaneous), secured loan and had extended temporary overdraft in gross violation of procedures prescribed for the same, thereby causing loss of Rs.4,41,97,083/- to Vijaya Bank, Koramangala Brach, Bengaluru and corresponding gain to his co- conspirators.
(b) Accused Nos.2 and 3 were the Board of Directors of the said company. A Current Account No.139400301000330 was opened in the name of M/s. Stratycon Technologies Pvt. Ltd., at Vijaya Bank, Koramangala Branch, Bengaluru on 08.08.2007. 4 Spl.C.C.No.5/2010 Accused Nos.2 and 3 were the authorized signatories for operating the said account.
(c) Accused No.1 had extended temporary overdraft (hereinafter referred to as 'TOD') of Rs.10,07,645/- on 14.08.2007, within a week from the date of opening of the current account. The scrutiny of the transactional statement shows that accused No.1 had extended TOD up to Rs.13,99,495/-, and the same was grossly in excess of his delegated financial powers. The TOD beyond Rs.10 lakhs was to be reported to the Regional Manager, Vijaya Branch, Regional Office, Bengaluru (South), Primrose Road, Bengaluru. But he had concealed the TOD extended in excess of his delegated powers in gross violation of the procedures prescribed for the same.
(d) Accused Nos.2 and 3 have submitted an application dated 13.08.2007 seeking secured term loan of Rs.65 lakhs and overdraft limit of Rs.35 lakhs in the name of said company - M/s. Stratycon Technologies Pvt. Ltd., for the purpose of purchase of computer hardware 5 Spl.C.C.No.5/2010 and for meeting working capital requirements. The said company had offered property located at No.32, Sree Hanuman Township, Yadavanahalli Village, Attibele Hobli, Anekal Taluk, Bengaluru District, held in the name of Sri. K. Shashi Kiran, resident of No.17, 4th Cross, Javariah Garden Extension, Thyagaraja Nagara, Bengaluru, and property held at No.88, Sree Hanuman Township Yadavanahalli Village, Attibele Hobli, Anekal Taluk Bengaluru District held in the name of Sri. K. Veeresham resident of No.19, 2nd Cross, 1st Main, RMV II Stage, Dollars Colony, Bengaluru, as collateral security against the said loan. Accused No.1 had sanctioned term loan of Rs.30 lakhs on 11.09.2007. The borrower had submitted quotations of M/s. S.L.V. Solutions, No.34, 1st Floor, 3rd Cross, 10th Main, Banashankari III Stage, Bengaluru, and M/s. Vignesh Techno Services, No.599, 8th Block, Koramangala, Bengaluru regarding the supply of computer hardware/software. The said amount of Rs.30 lakhs came to be disbursed in favour of the above said two firms and in favour of M/s. Impact Securitas, No.606, 6th Floor, A-Wing, Mittal Towers, M.G. Road, Bengaluru. 6 Spl.C.C.No.5/2010
(e) A demand draft dated 11.09.2007 for Rs.17,94,000/- was issued in favour of M/s Vignesh Techno Services (hereinafter referred to as 'VTS'), and the same came to be deposited in the current account No.24600200000144 held in the name of M/s. Vignesh Techno Services at Bank of Baroda, BTM Layout Branch, Bengaluru, on 12.09.2007. M/s. Vignesh Techno Services is a non-existing firm held in the name of Sri. Vinay K.R. (accused No.4) who is son of accused No.3- Sri. Ramaiah Setty. The said firm had not supplied any computer hardware/software against the quotation/invoice submitted to M/s. Stratycon Technologies Pvt. Ltd., Bengaluru. A cheque bearing No.235954 dated 12.09.2007 for Rs.17,94,000/- was issued in favour of M/s. Stratycon Technologies Pvt. Ltd., and the same came to be deposited in the current account No.29600200000121 held at Bank of Baroda, BTM Layout Branch, Bengaluru. Thus, accused Nos.2 and 3 had fraudulently obtained Rs.17,94,000/- from Vijaya Bank, Koramangala Branch, Bengaluru.
7 Spl.C.C.No.5/2010
(f) A demand draft dated 11.09.2007 for Rs.2,43,984/- was issued in favour of M/s. SLV Solutions, and the same was deposited in current account No.CBCA- 148 held at Corporation Bank, Padmanabha Nagar Branch, Bengaluru. The said M/s. SLV Solutions is a non- existing firm held in the name of accused No.3- Sri. Ramaiah Setty, resident of No.519, 2nd Floor, 10th Cross, 12th Main, Padmanabha Nagar, Bengaluru. The said firm had not supplied any computer hardware/software against the quotation/invoice submitted to the bank. A cheque bearing No.247576 dated 12.09.2007 for Rs.2,43,364/- was issued in favour of M/s. Stratycon Technologies Pvt. Ltd., and the same came to be deposited in the current account No.29600200000121 held at Bank of Baroda, BTM Layout Branch, Bengaluru. Thus, accused Nos.2 and 3 had fraudulently obtained Rs.2,43,364/- from Vijaya Bank, Koramangala Branch, Bengaluru.
(g) A cheque bearing No.244905 dated 16.08.2007 (correct date is 16.10.2007) for
Rs.9,62,016/- was issued in favour of M/s. Impact 8 Spl.C.C.No.5/2010 Securitas, and the same was deposited in current account No.30014813510 held in the name of M/s. Impact Securitas, No.606, 6th Floor, A-Wing, Mittal Towers, M.G. Road, Bengaluru at State Bank of India, Church Street Branch, Bengaluru. A cheque bearing No.981842 dated 17.10.2007 for Rs.7 lakhs, and another cheque bearing No.981843 dated 17.10.2007 for Rs.2,60,000/- were issued in favour of M/s. Stratycon Technologies Pvt. Ltd., and the same came to be deposited in current account No.139400301000330 held at Vijaya Bank, Koramangala Branch, Bengaluru. There was no underlying business transactions between the two companies, and accused No.2 had got the entire amount disbursed in favour of M/s. Impact Securitas transferred in favour of his company with the help of Sri. G.R. Nagabhushana, Proprietor of M/s. Impact Securitas, stated above.
(h) Accused No.1 had not entrusted the loan application of M/s. Stratycon Technologies Pvt. Ltd., to the two officers working in the Advances Section of said Vijaya Bank for appraisal, and himself had dealt with the 9 Spl.C.C.No.5/2010 matter, and he had prepared an appraisal note and had obtained the signatures of the said two officers on the same, much after the sanction and disbursal of the loan. Two properties were offered as collateral securities against the said loan, and accused No.1 had not created equitable mortgage of the said properties in favour of the Bank on the date of disbursal of the loan. However, he (accused No.1) had created equitable mortgage of the properties in favour of the bank on 12.12.2007, much after the sanction/disbursal of the loan. No charge was created on the fixed assets of the company on the records of the Registrar of Companies, Kendriya Sadan, Koramangala, Bengaluru.
(i) Accused No.1 had sanctioned Cash Credit (misc.) limit of Rs.60 lakhs on 30.10.2007 against the existing collateral securities. He had sanctioned additional limit of Rs.40 lakhs on 11.03.2008, and further limit of Rs.50 lakhs on 13.03.2008 without obtaining applications from the borrower, and additional securities against the same. He had allowed the borrowings to exceed the total sanction limit of Rs.150 lakhs without 10 Spl.C.C.No.5/2010 sanctioning additional limits. He had not entrusted the application for loan submitted by M/s. Stratycon Technologies Pvt. Ltd., Bengaluru to the two officers working in the Advances Section of Vijaya Bank, Koramangala Branch, Bengaluru for appraisal. He had prepared an appraisal note subsequently, and had obtained the signatures of two officers of said Vijaya Bank to the said appraisal note. The limit had touched Rs.2,77,75,141/- on 30.03.2008, and hence, a cheque bearing No.108607 dated 30.03.2008 for Rs.220 lakhs was deposited in the cash credit account and the limit was brought down to Rs.57,75,141/-. The said cheque was bounced for want of balance in the corresponding account. The limit had touched Rs.3,01,77,343/- on 29.06.2008, and hence, a cheque bearing No.238207 dated 29.06.2008 for Rs.30 lakhs was deposited in the cash credit account, and the limit was brought down to Rs.1,06,346/-. The said cheque was bounced for want of balance in the corresponding account.
(j) Two properties were taken as collateral security against the secured loan of Rs.30 lakhs, and the 11 Spl.C.C.No.5/2010 cash credit (miscellaneous) of Rs.60 lakhs were sanctioned against the same. The said properties were not valued at the time of sanctioning of secured loan of Rs.30 lakhs. The said properties came to be valued by Sri. Udaykumar Shetty, Approved Valuer, Aarthik Ventures, 204/C, Millers Road, Bengaluru, and had submitted a report valuing the properties at Rs.35.36 lakhs. The properties were highly inadequate for covering the total exposure of Rs.90 lakhs.
(k) The cash credit was sanctioned for meeting the working capital requirement of M/s. Stratycon Technologies Pvt. Ltd., and the entire amount was utilized for meeting outstanding liabilities with other individuals/institutions/ banks, and partly received by the directors themselves. The loan amount was fraudulently taken away through the Accounts held in the name of M/s. SLV Solutions, M/s. Sree Durga Enterprises, M/s. Vignesh Techno Services, and M/s. Sughosh Advertising. A cheque bearing No.925244 dated 26.03.2008 for Rs.60,07,020/- was issued in favour of M/s. Sughosh Advertising, and the same came to be deposited in 12 Spl.C.C.No.5/2010 account No.CBCA 87 held at Corporation Bank, BTM Layout Branch, Bengaluru. M/s. Sughosh Advertising is a non existing firm and the same was being operated by accused No.5-Smt. Greeshma, Assistant (HR) of M/s. Stratycon Technologies Pvt. Ltd., Bengaluru, and the entire loan amount was used for personal benefits, purchase of properties, and for meeting the outstanding liabilities of the two directors/company in various banks/institutions/individuals.
(l) Another secured loan of Rs.60 lakhs was sanctioned in the name of M/s. Stratycon Technologies Pvt. Ltd., on 07.02.2008 for the purpose of purchase of GSM Software, and Home Automation Systems with Accessories, and Rs.60 lakhs came to be transferred in favour of Cash Credit (Misc.) Account No.139406011000096 of M/s. Stratycon Technologies Pvt. Ltd., held at Vijaya Bank, Koramangala Branch, Bengaluru on 07.02.2008. The said amount was further transferred to current account No.30315364673 of M/s. SLV Solutions, No.66, BHECS Layout, 2nd Main, BTM Layout, 2nd Stage, Bengaluru held at State Bank of India, 13 Spl.C.C.No.5/2010 J.P. Nagar Branch, Bengaluru through RTGS. Said M/s. SLV Solutions is a non-existing firm held in the name of Ms. Vidya Lakshmi D/o Sri. Ramaiah Setty (accused No.3), resident of No.66, BHECS Layout, 2nd Main, BTM Layout, 2nd Stage, Bengaluru. The current account No.30315364673 came to be opened on 23.01.2008 based on the introduction of Ramaiah Setty (accused No.3). The said firm had not supplied any computer hardware/software against the payment, and the entire amount was withdrawn in cash by accused Nos.3 - Sri. Ramaiah Setty and accused No.4 - Sri. Vinay K.R.
(m) The legal scrutiny report regarding property held at No.50/1, Kailasanahalli, Jigani Hobli, Anekal Taluk, Bengaluru District submitted by Sri. Sudhakar Shettigar, Panel Advocate, Indiara Nagar, II Stage, Bengaluru. The said property was held in the name of Sri. Veerasham resident of No.15/1, 3rd Main, NT Pet, Bengaluru, and was valued at Rs.2,91,39,300/- by Sri. Udayakumar Shetty, approved valuer, M/s. Aarthik Ventures, 204/C, Millers Road, Bengaluru, and the same was later valued by Sri. Nutan Shetty V., Valuer, Chandra 14 Spl.C.C.No.5/2010 Layout, Nagarbhavi Post, Bengaluru at Rs.3,26,70,000/-. No equitable mortgage of the said property was created in favour of the bank, and the original title deed of the property came to be returned during the pendency of the repayment of loan, thereby leaving the loan totally unsecured.
(n) There is an outstanding of Rs.4,41,97,083/- in the aforesaid four accounts as on 28.12.2008, the details of which are given as follows :-
Sl. A/c No. Amount
No. Outstanding
(in Rs.)
1. Current A/c No.139400301000330 87,051
2. Secured Loan A/c 27,13,991
No.139409041000069
3. Cash Credit (Misc.) A/c 3,48,71,708
No.139406011000096
4. Secured Loan A/c 65,24,333
139409041000073
Total 4,41,97,083
(o) Accused No.1 - Sri. Radhakrishna Shetty was serving as the Branch Head, Vijaya Bank, Koramangala Branch, Bengaluru, and had dominion over the money of the Bank, and was to lend the said money in accordance 15 Spl.C.C.No.5/2010 with the procedure prescribed for the same. However, he had entered into a criminal conspiracy with accused No.2
- Sri Mithun Narayan, Managing Director, M/s. Stratycon Technologies Pvt. Ltd., Bengaluru, and others in the matter of sanction and disbursal of various credit facilities in the name of M/s. Stratycon Technologies Pvt. Ltd., and in furtherance of the said conspiracy, various credit facilities were extended in favour of the said company on the basis of forged and fabricated documents in gross violation of procedures prescribed for the same, thereby committed criminal breach of trust and criminal misconduct. The said amount was fraudulently siphoned off by accused Nos.2 and 3 by forging the bills/invoices regarding supply of computer hardware/software in the name of four fictitious/non- existing firms without creating tangible assets against the loan, thereby causing a loss of Rs.4,41,97,083/- to the Vijaya Bank, Koramangala Branch, Bengaluru, and corresponding gain for themselves. Accused Nos.4 - Sri Vinay K.R. and accused No.5 - Smt. Greeshma H.G., had actively participated in cheating by carrying out 16 Spl.C.C.No.5/2010 transactions in the name of two non-existing firms. Thus accused Nos.1 to 5 have committed the alleged offences.
3. It appears from the order sheet and case file that accused No.2 - Sri. Mithun Narayan and accused No.3- Ramaiah Setty have obtained anticipatory bail from the Court of XXI Addl. City Civil and Sessions Judge (Special Judge for CBI Cases), Bengaluru (CCC-4) in Crl.Misc.P.No.560/2009 dated 17.03.2009.
Thereafter, they have filed an application under Section 439 of Cr.P.C., before the CCH-4, Bengaluru. They released on bail on 13.04.2009.
4. After filing of the charge-sheet cognizance was taken against the accused Nos.1 to 5 for the alleged offences and summons issued against them. In response to the summons they appeared before the Court through their counsel.
Accused No.1 had filed application under Section 437 and 439 of Cr.P.C., through his counsel on 19.02.2010 and he released on bail. On 26.02.2010 accused Nos.3, 4 and 5 have filed an application under 17 Spl.C.C.No.5/2010 Section 437 and 439 of Cr.P.C., through their counsel and they released on bail.
Copies of charge-sheet, and copies of documents were furnished to the counsels for the accused persons as required under Section 207 of Cr.P.C.
5. On 11.10.2012 this Court has passed an order stating that there is a prima facie case to frame charge against the accused persons for the offences alleged against them.
Charges framed against accused Nos.1 to 5 for the offences punishable under Sections 120-B, 420, 468, and 471 of IPC, and under Section 13(2) read with Section 13(1) (d) of P.C. Act, 1988. They pleaded not guilty and claimed to be tried.
6. In order to prove the case, the prosecution has examined PWs.1 to 42, and got marked Ex.P1 to Ex.P319.
After closing the evidence on prosecution side, the statement of accused persons recorded under Section 18 Spl.C.C.No.5/2010 313 of Cr.P.C., and they denied incriminating evidence stated against them.
Counsel for the accused No.1 has filed written statement under Section 313 of Cr.P.C.
No oral evidence on behalf of the accused persons, but they got marked Ex.D1 to Ex.D8 during the cross- examination of prosecution witnesses.
7. Arguments heard on both sides, and arguments concluded on 11.06.2015, and perused the written arguments filed by the Public Prosecutor, and the counsel for accused No.1, and also perused the citations produced by prosecution side, and counsel for accused No.1, and counsel for accused Nos.2 to 5.
Counsel for accused Nos.2 to 5 has filed Memo stating that they adopting the written arguments filed by counsel for the accused No.1.
8. I have studied case file for judgment, and I found that charge was not framed against accused No.1 for the offence punishable under Section 409 of IPC. There are sufficient materials to frame the charge against 19 Spl.C.C.No.5/2010 accused No.1 for the said offence. On 08.07.2015 additional charge was framed against accused No.1 for the offence punishable under Section 409 of IPC. The accused No.1 pleaded not guilty. Hence, the case was posted to 13.07.2015 for evidence on the said offence by the prosecution side.
On 13.07.2015, the Public Prosecutor has filed memo stating that there is no further evidence on behalf of the prosecution, and closed its side. On the same day, counsel for the accused No.1 submitted that no defence evidence on the said offence.
Public Prosecutor submitted that arguments made earlier by the prosecution holds good for the said offence (Section 409 of IPC) also. On the same day, arguments heard partly on accused No.1 side, and thereafter, further arguments heard on accused No.1 side on the subsequent hearing dates, and also heard arguments of counsel for accused Nos.2 to 5, and reply arguments heard by the Public Prosecutor.
20 Spl.C.C.No.5/2010
Public Prosecutor, counsel for accused No.1, and counsel for accused Nos.2 to 5 have filed citations with memos. I have perused the said citations.
9. The points that arise for my consideration are as follows :-
1. Whether the prosecution proves that there is a valid sanction order to prosecute the accused No.1?
2. Whether the prosecution proves beyond all reasonable doubt that accused No.1 being the public servant working as Branch Head of Vijaya Bank, Koramangala Branch, Bengaluru, from 03.02.2007 to 23.08.2008 fraudulently and dishonestly with an intention to cheat the said bank, entered into criminal conspiracy with accused Nos.2 to 5 in the matter of sanction and disbursal of various credit facilities in the name of M/s. Stratycon Technologies Pvt. Ltd., Bengaluru, and in furtherance of the conspiracy, accused No.1 sanctioned secured loan of Rs.30 lakhs on 11.09.2007 (for purchase of computers), cash credit (miscellaneous) of Rs.60 lakhs on 30.10.2007 (for the purpose of software development), another secured loan of Rs.60 lakhs on 07.02.2008 (for purchase of modem and software development) in favour of M/s.
Stratycon Technologies Pvt. Ltd., Bengaluru, and also sanctioned temporary overdrafts in the current account of M/s. Stratycon Technologies Pvt. Ltd., Bengaluru and the loans were sanctioned on the basis of false invoices/quotations given by non-existing firms i.e., M/s. SLV Solutions of Ms. Vidya Lakshmi (daughter of accused No.3), M/s. SLV Solutions 21 Spl.C.C.No.5/2010 of Ramaiah Setty (accused No.3), M/s. Vignesh Techno Services of accused No.4, and M/s. Sree Durga Enterprises, M/s. Impact Securitas of H.R. Nagabhushan and M/s. Sughosh Advertising of accused No.5, and major portion of the loan amounts were disbursed in favour of the said non-existing firms on the basis of the false quotations and invoices, but none of the firms supplied any material mentioned in the quotations/invoices and accused Nos.2 and 3 have got the loan amounts from the above said firms for their personal requirements and thereby, accused Nos.1 to 5 have caused loss of Rs.4,41,97,083/- to the said bank and thereby accused have committed the offence punishable under Section 120-B of IPC?
3. Whether the prosecution further proves beyond all reasonable doubt that in furtherance of the criminal conspiracy the accused Nos.1 to 5 fraudulently and dishonestly with an intention to cheat the said Vijaya Bank, created false quotations/invoices of non-existing firms stated above and produced them along with the loan applications and induced the bank to grant the above said loans on the basis of the above said false quotations/invoices, and there was no supply of materials as per the quotations/invoices in favour of M/s. Stratycon Technologies Pvt. Ltd., Bengaluru, and the loan amounts were also not utilized for the purpose for which the loans were sanctioned and thereby they have committed the offence punishable under Section 420 of IPC?
4. Whether the prosecution further proves beyond all reasonable doubt that in furtherance of the said criminal conspiracy accused Nos.2 to 5 fraudulently and dishonestly created false quotations/invoices in the name of non-existing firms stated above to cheat the above said bank, 22 Spl.C.C.No.5/2010 and there was no supply of materials as per the quotations/invoices in favour of M/s. Stratycon Technologies Pvt. Ltd., Bengaluru, and accused No.1 altered the loan amount in words and figures from Rs.20 lakhs to Rs.60 lakhs without authentication of the borrower, and thereby committed the forgery for the purpose of cheating the above said bank and thereby, accused Nos.1 to 5 have committed the offence punishable under Section 468 of IPC?
5. Whether the prosecution further proves beyond all reasonable doubt that in furtherance of the above said criminal conspiracy, accused Nos.1 to 5 fraudulently and dishonestly knowing or have reason to believe that the quotations/invoices and other documents said to have been issued by the firms are false documents, used the same as genuine documents to cheat the above said bank and thereby accused Nos.1 to 5 have committed the offence punishable under Section 471 of IPC?
6. Whether the prosecution further proves beyond all reasonable doubt that accused No.1 being a public servant in the capacity of Branch Head, Vijaya Bank, Koramangala Branch, Bengaluru, had domain over the money of the Bank and was to lend the money in accordance with the procedures prescribed for the same, but has entered into a criminal conspiracy with accused Nos.2 to 5 in the matter of sanction and disbursal of various credit facilities (secured loan of Rs.30 lakhs, cash credit (miscellaneous) of Rs.60 lakhs, secured loan of Rs.60 lakhs and temporary over drafts) to M/s. Stratycon Technologies Pvt. Ltd., Bengaluru and in furtherance of the said conspiracy, various credit facilities were extended in favour of the said company on the basis of the forged and fabricated documents in gross violation of procedures prescribed for the same, and thereby 23 Spl.C.C.No.5/2010 accused No.1 committed criminal breach of trust and committed an offence punishable under Section 409 of IPC?
7. Whether the prosecution further proves beyond all reasonable doubt that accused No.1 being a public servant in the capacity of Branch Head, Vijaya Bank, Koramangala Branch, Bengaluru, dishonestly and fraudulently disbursed the above said loans having the reason to believe that the quotations/invoices annexed to the loan applications said to have been issued by the non-existing firms sanctioned the loans stated above to M/s. Stratycon Technologies Pvt. Ltd., Bengaluru in collusion with accused Nos.2 to 5 without proper appraisal by not entrusting the loan application to the two officers working in the advance section of the said bank and accused No.1 himself prepared the appraisal note and took the signatures of the aforesaid two officials after sanction and disbursal of the loan, and got the equitable mortgage of two properties bearing Nos.32 and 88 of Sri Hanuman Township after disbursal of the loan, and further accused No.1 changed the loan amount in the loan documents from Rs.20 lakhs to Rs.60 lakhs without authentication of the borrower, and by abusing his official position as public servant, he obtained for himself or for any other person valuable thing or pecuniary advantage and thereby accused No.1 committed criminal misconduct punishable under Section 13(2) r/w 13(1)(d) of the PC Act?
8. What order?
10. My findings on the above points are as follows:-
Point No.1 : In the affirmative.
24 Spl.C.C.No.5/2010
Point No.2 : In the affirmative against accused
Nos.1, 2, 3, 4, and 5.
Point No.3 : In the affirmative against accused
Nos.1, 2, 3, 4, and 5.
Point No.4 : In the affirmative against accused
Nos.1, 2, 3, and 4.
Point No.5 : In the affirmative against accused
Nos.1, 2, 3, and 4.
Point No.6 : In the affirmative against accused
No.1.
Point No.7 : In the affirmative.
Point No.8 : See the final order for the
following :-
REASONS
11. POINT NO.1 : The Inspector of Police,
CBI-ACB, Bengaluru, has filed the charge-sheet against accused No.1 to 5 for the offences punishable under Section 120-B read with Sections 409, 420, 468 and 471 of IPC and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988.
12. Accused No.1 - Sri. Radhakrishna Shetty was working as Branch Head of Vijaya Bank, Koramangala Branch, Bengaluru, during the relevant period (from 03.02.2007 to 23.08.2008). It is not in dispute that he was a public servant.
25 Spl.C.C.No.5/2010
13. As per Section 19 of P.C. Act, previous sanction is necessary to prosecute the public servant. The prosecution has obtained the sanction order from Vijaya Bank on 17.12.2009 to prosecute against the accused No.1. The sanction order dated 17.12.2009 was issued by Sri. K. Jayakara Shetty, General Manager (Personnel), Vijaya Bank, Bengaluru.
14. On 03.10.2011, the counsel for accused No.1 had filed an application under Section 19(1) (c) of P.C. Act read with Cr.P.C., regarding validity of sanction, and prays to hold the sanction order dated 17.12.2009 is void, and discharge of accused No.1. After contest, the said application was dismissed on 06.09.2012 by holding that the General Manager (Personnel) is the disciplinary authority, and has power to issue the sanction order in respect of accused No.1.
Against the said order, accused No.1 had preferred Criminal Petition No.1547/2013 before the Hon'ble High Court of Karnataka, Bengaluru, which was disposed off on 02.02.2015. In the said order observed that "In the 26 Spl.C.C.No.5/2010 impugned order, the learned Special Judge has held that 'if permissible the said question can be urged at the time of final disposal of the case.' The finding appears to be rather reserved. The petitioner (accused No.1) can raise the grounds urged herein when the matter is heard on merits of the case." With these observations, the said petition was dismissed.
In para 15 at page 14 and 15 of the order passed by this Court on 06.09.2012 observed as follows :-
"The Gazette Notification clearly discloses that the Central Government has given the sanction regarding the above said amendment and afterwards, it has been published in the Gazette. As stated above, the amendment is also regarding the schedule to the above said Viajay Bank Officer Employees' (Discipline and Appeal) Regulations, 1981 and according to that schedule the sanction has been given to prosecute A.1 by the General Manager (Personnel). Hence, at this stage, the prosecution has produced to the Court the Gazette Notification to show that the General Manager (Personnel) is the competent authority to give the sanction order to prosecute A.1. As stated above, the said Gazette Notification has been approved by the Central Government. Hence, I feel eventhough, the CBI has not produced the Gazette Notification copy regarding Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981, by producing the 27 Spl.C.C.No.5/2010 Gazette Notification of the Amendment made to the same as stated above, the prosecution has placed the material to show that the sanctioning officer was competent to pass the sanction order, which is in question. Hence, I feel at this stage, it is not necessary for this Court to go into the question whether the Vijaya Bank Officers' Employees' (Discipline and Appeal) Regulations, 1981 has been approved by the Central Government and gazetted or not. As already stated above, the Prosecution has produced the gazette notification to show that, the sanctioning authority had the power to pass the sanction order for prosecuting A1. I feel, at this stage, it is not necessary for this Court to go into the constitutional validity of the above said regulation itself. If permissible the said question can be urged at the time of final disposal of the case. As stated above, for this case, the Court is mainly concerned with the question whether the sanctioning authority had the power to give the sanction or not. As stated above the amendment stated above discloses that, the General Manager (Personnel) is the disciplinary authority and has the power to issue the sanction order in respect of A1."
It is clearly stated in this order that it is not necessary for this Court to go into the constitutional validity of the above said regulation itself {Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981)}. If permissible the said question can be urged at the time of final disposal of the case.
28 Spl.C.C.No.5/2010
During the course of arguments on merits of this case, no arguments were canvassed by the counsel for accused No.1 before this Court regarding constitutional validity of the said Regulations.
15. Section 19 of the P.C. Act states as follows :-
"19. Previous sanction necessary for prosecution.- (1) No court shall take cognizance of an offence punishable under Sections 7, 10, 11, 13 and 15 alleged to have been committed by a public servant, except with the previous sanction,-
(a) in the case of a person who is employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of that Government;
(b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the State Government, of that Government;
(c) in the case of any other person, of the authority competent to remove him from his office.
(2) xxxxxxxx (3) xxxxxxxx (4) xxxxxxxx 29 Spl.C.C.No.5/2010
16. Ex.P255 is the sanction order dated 17.12.2009 issued by Sri. K. Jayakara Shetty, General Manager (Personnel), Vijaya Bank, Bengaluru. Said K. Jayakara Shetty is examined as PW.35, and he has adduced evidence regarding sanction order issued by him.
17. Counsel for accused No.1 has argued that PW.35 has no power to issue sanction order for prosecution against accused No.1. On the other hand, Public Prosecutor has argued that PW.35 is the competent authority to remove the accused No.1 from his office, hence, he has power to issue sanction order to prosecute accused No.1.
18. PW.35 - K. Jayakara Shetty, Retired Bank General Manager has deposed in the evidence that from 2006 to 2012 he worked as General Manager under various categories and also he worked as General Manager (Human Resources) from 2009 to 2012 in Vijaya Bank, Head Office, Bengaluru. He had power to issue sanction order for prosecution in respect of Scale- 30 Spl.C.C.No.5/2010 IV and Scale-V Officers of Vijaya Bank namely Chief Managers and Assistant General Managers. He was the removal authority and also the disciplinary authority in respect of Scale-IV and Scale-V officers of said Bank. He has stated that he had issued the sanction order dated 17.12.2009 as per Ex.P.255. He has verified the investigation report and witnesses thereon carefully before giving the prosecution sanction. He has deposed in the cross-examination that he has issued sanction order - Ex.P255 under the provisions of P.C. Act. On 22.05.2014 he has deposed in the cross examination that he has brought the Xerox copy of the gazette notification dated 09.04.2001 to show that he is the competent authority for Scale-IV and V officials. The said gazette notification may be available in Vijaya Bank. The gazette notification pursuance to which Vijaya Bank Officer Employees' (Conduct) Regulations, 1981 was made might be available in the Bank. There is no denial suggestion that there is no gazette notification dated 09.04.2001 to show that he is the competent authority for Scale-IV and V officials. Hence, non-production of 31 Spl.C.C.No.5/2010 original gazette notification dated 09.04.2001 is not fatal to the case of the prosecution.
19. He has deposed in the cross-examination in para 2 at page 8 that "along with the sanction order an extract of Vijaya Bank Officer Employees' (Conduct) Regulations, 1981 has been produced which contains the original rubber stamp seal of the Vigilance Department, and there is a short signature in seal, and that signature is not his signature. The above said extract of Regulations is not the full Conduct Regulation." I have perused the enclosures which attached to Ex.P255- sanction order. It is the Xerox copy of Vijaya Bank Officer Employees' (Conduct) Regulations, 1981, and Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981. The relevant pages are only produced, and also produced schedule of Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981. He has deposed that according to the said schedule he is having power to sanction prosecution regarding Scale-IV and V officers. Again he deposed that in the said schedule he is shown as only the disciplinary 32 Spl.C.C.No.5/2010 authority for Scale-IV and V officers, and not as the prosecution sanction authority. On the basis of this evidence, counsel for accused No.1 has contended that PW35 - K. Jayakara Shetty is only disciplinary authority and has no power to issue sanction and he is not a sanction authority. In other words, he has no power and not competent authority to issue sanction order against accused No.1. Public Prosecutor has contended that PW.35 being the disciplinary authority has power to remove Scale-IV and V officials. In other words, he is having power to remove the accused No.1 from service. Hence, PW.35 is the competent person to issue sanction order, and he has issued Ex.P255 - Sanction Order.
Xerox copy of Vijaya Bank Officer Employees' (Conduct) Regulations, 1981, and Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981 is produced.
It is stated in Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981 that "In exercise of the powers conferred by Section 19 of the Banking Companies 33 Spl.C.C.No.5/2010 (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), the Board of Directors of VIJAYA BANK in consultation with the Reserve Bank of India and with the previous sanction of the Central Government hereby makes the following Regulations, namely :-
Rule (1) of the said Regulations states that the Regulations i.e., Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981 came into force on 01.12.1981.
Rule (4) is relating to Penalties. It is stated that the following are the penalties which may be imposed on an officer employee, for acts of misconduct or for any other good and sufficient reasons.
Minor Penalties :-
(a) xxxxxx
(b) xxxxxx
(c) xxxxxx
(d) xxxxxx
(e) Reduction to a lower stage in the
time scale of pay for a period not
exceeding 3 years without
cumulative effect and not adversely
affecting the officers' pension.
34 Spl.C.C.No.5/2010
Major Penalties :-
(f) Save as provided for in (e) above
reduction to a lower stage in the
time scale of pay for a specified
period, with further directions as to whether or not the officer will earn increments of pay during the period of such reduction and whether on the expiry of such period the reduction will or will not have the effect of postponing the future increments of his pay;
(g) Reduction to a lower grade or post;
(h) Compulsory retirement;
(i) Removal from Service which
shall not be a disqualification
for future employment;
(j) Dismissal which shall ordinarily be a
disqualification for future
employment.
Rule 5 of the said Regulation is relating to
"Authority to Institute Disciplinary Proceedings and
Impose Penalties." It reads as follows :
(1) The Managing Director or any other authority empowered by him by general or special order may institute or direct the Disciplinary Authority to institute disciplinary proceedings against an Officer employee of the Bank.
(2) The Disciplinary Authority may himself institute disciplinary proceedings.35 Spl.C.C.No.5/2010
(3) The Disciplinary Authority or any authority higher than it, may impose any of the penalties specified in Regulation 4 on any officer employee."
Along with copy of the said Regulation produced "Schedule of Vijaya Bank Officer Employees' (Discipline and Appeal) Regulations, 1981." It appears from this schedule that General Manager (Personnel) is the Disciplinary Authority for Scale-IV and V officers.
It is clearly stated in Rule 5 (3) of the Regulations stated above that Disciplinary Authority or any authority higher than it, may impose any of the penalties specified in Regulation 4 on any officer employees. It is clear that PW.35 being the disciplinary authority has power to impose any of the penalties mentioned in Rule 4 of the Regulations. As per the Rule 4 (i) of the said Regulations, PW.35 being the disciplinary authority has power to remove from service which shall not be a disqualification for future employment.
It is clear that PW.35 is having power to remove the Scale-IV and V officers of the said Bank. It is not in 36 Spl.C.C.No.5/2010 dispute that accused No.1 was a Scale-IV or V officer during the relevant period.
In view of the said Regulations, I hold that PW.35 is the competent authority to remove the accused No.1 from service, and hence, he is a competent authority to issue sanction order for prosecution against accused No.1. Under these circumstances, I hold that there is no substance in the contention of counsel for accused No.1 that PW.35 is only disciplinary authority for Scale-IV and Scale-V officers, and not the prosecution sanctioning authority as deposed in the evidence of PW.35. Whatever may be the evidence adduced by PW.35 regarding issuance of sanction order to prosecute against accused No.1, the above said Regulation is important. As per the said Regulation, PW.35 is the competent authority to remove the accused No.1 from service, and consequently, he being the competent authority, issued sanction order to prosecute accused No.1.
Apart that during the course of recording of the statement under Section 313 of Cr.P.C., accused No.1 37 Spl.C.C.No.5/2010 has admitted that "PW.35 is the removal authority." Q.No.433 put to accused No.1 stating that PW.35 has further deposed that he was the removal authority and also disciplinary authority in respect of Scale-IV and Scale-V officers of Vijaya Bank and he has given sanction order to prosecute accused No.1 as per Ex.P255, and he has signed the same. What do you say? He answered as "partly yes, and second part he does not know." It is clear that he has admitted that PW.35 was the removal authority and also disciplinary authority for Scale-IV and Scale-V officers of the said Bank. Under these circumstances, there is no substance in the contention of counsel for accused No.1 that PW.35 is not a competent person to remove accused No.1 from service.
It is clear from the above discussion that PW.35 is the competent person to remove the accused No.1 from service, and he is the sanctioning authority for issuing sanction order to prosecute accused No.1 for the offences alleged in the charge-sheet.
38 Spl.C.C.No.5/2010
20. Counsel for accused No.1 has contended that Ex.P255 is not a valid sanction order. PW.35 has issued the said sanction order without application of mind, and he copied the model sanction order (Ex.D2) which sent by the CBI Officer, and issued Ex.P255 without application of mind. On the other hand, Public Prosecutor has argued that it cannot be said that PW.35 has not applied his mind in issuing the sanction order, only on the ground that model sanction order sent by the CBI Officer to the Vigilance Department of Vijaya Bank. He further contended that Ex.P255 sanction order clearly shows that sanctioning authority i.e., PW.35 has applied his mind and issued the sanction order.
I have perused the Ex.P255 sanction order dated 17.12.2009 which runs into three pages. It appears that said PW.35 - K. Jayakara Shetty, General Manager (Personnel) has detailed the facts of the case regarding various loan transactions took place between M/s. Stratycon Technologies Pvt. Ltd., and Vijaya Bank and accused persons. He has clearly stated in the said order that he has carefully examined the materials such as 39 Spl.C.C.No.5/2010 copy of FIR, copies of the material documents like statement of accounts, cheques etc., collected, and copies of statement of witnesses recorded under Section 161 of Cr.P.C., during investigation placed before him in regard to the allegations. A prima facie case has been made against accused No.1, and he shall be prosecuted in the Court of law for the aforesaid offences.
21. It is held in AIR 2011 Supreme Court 356 (Kootha Perumal vs. State Tr. Inspector of Police, Vigilance and Anti Corruption) as follows :-
Prevention of Corruption Act (49 of 1988) -
Sanction to prosecute - Legality - Examination of material facts by sanctioning authority Sanction order specifically stating that statements of witnesses have been duly examined - Other materials such as copy of FIR as well as other official documents such as different mahazars were carefully examined - Upon examination of statements of witnesses as also material on record, sanctioning authority has duly recorded its satisfaction that appellant should be prosecuted - Sanction order is legal.
22. In the case on hand, it is clear from the contents of Ex.P255 - Sanction Order that after going through the entire materials he has satisfied and issued 40 Spl.C.C.No.5/2010 sanction order. In other words, he has applied his mind in issuing the sanction order, and then issued the sanction order. He has deposed in the chief examination that after going through the investigation report submitted by the I.O., and also gone through the fraud committed in respect of M/s. Stratycon Technologies Pvt. Ltd., and it has turned to be a fraudulent transaction committed by a public servant, Bank Manager-accused No.1 and others for pecuniary benefits and with a total mala fide intention, he has carefully studied the notes submitted to him and convinced beyond doubt that, the said person (accused No.1) should be tried under the procedure. Hence, he has issued the sanction order to prosecute accused No.1. He has further deposed that he has verified the investigation report, and witnesses thereon carefully before giving the prosecution sanction. In his cross-examination nothing is elicited to disbelieve his evidence and also nothing is elicited to show that Ex.P255 sanction order issued by him without applying his mind. There is no suggestion at all to show that he 41 Spl.C.C.No.5/2010 has issued the sanction order without application of mind.
He has deposed in the cross-examination (para 5, page 9) that contents of Ex.P255 sanction order and contents of Xerox copy of model sanction order are identical. Said Xerox copy of model sanction order is marked as Ex.D2. It appears that said documents are similar, and identical. Ex.D3 is the office note addressed to the Chairman and Managing Director of the Bank for information, and said office note was prepared by PW.35. It is clearly stated in the office note that General Manager (Personnel) is the competent authority to issue sanction order for prosecution. He has admitted in the cross-examination that in Ex.D3 he has mentioned that the bank has received the model sanction order from CBI, and he sent the model sanction order received from CBI along with Ex.D3 to the Chairman of the Bank for information and approval. Ex.D4 is the letter dated 02.12.2009 written by Sri Narasimha Komar, Superintendent of Police, CBI-ACB, Bengaluru to the Chief Vigilance Officer, Vijaya Bank, Bengaluru (PW.35). 42 Spl.C.C.No.5/2010 He has admitted that in Ex.D4 it is stated that model sanction order is also enclosed to the letter - Ex.D5 (model sanction order). It is relevant to state that in Ex.D4 letter dated 02.12.2009 stated that "model sanction order is forwarded only for the guidelines of the competent authority for according sanction for prosecution in the case." Ex.D5 is the model sanction order which sent along with Ex.D4 to the Chief Vigilance Officer, Vijaya Bank. It is clear from Ex.D4 that said model sanction order was sent to Vijaya Bank, only for the guidelines of the competent authority for according sanction for prosecution in the case. Ex.D6 is the letter dated 02.12.2009 sent to the Chief Vigilance Officer, Vijaya Bank, Bengaluru. It appears that along with the said letter, CBI Report was sent to the said Vigilance Officer. It is clearly stated in the said letter that "calendar of evidence (oral and documentary), statements of accused persons, statements of witnesses and copies of relied upon documents are also enclosed for according sanction for prosecution." The contents of this document are not disputed by the counsel for the 43 Spl.C.C.No.5/2010 accused. Ex.D4 and 6 are the letters written by CBI, ACB, Bengaluru to the Chief Vigilance Officer, Vijaya Bank for according sanction. PW35 has deposed in the cross-examination in para 7 at page 6 that "he has not received any letter directly from the CBI office in his name along with copies of documents with a request to give sanction order. The file came to him from the Vigilance Department for sanction." It is relevant to state that one department use to write a letter for any purpose to the head of any other department, and accordingly, CBI had written letters as per Ex.D4 and 6 to the Chief Vigilance Officer, Vijaya Bank, and the said officer had sent the case records to PW.35 for consideration of the matter of sanction to prosecute accused No.1. No doubt, Ex.P255, Ex.D2 and Ex.D5 sanction order appears to be similar, but only on that ground it cannot be said that PW.35 has copied the same and issued sanction order as per Ex.P255 without applying his mind. On the other hand, Ex.P255 sanction order, and evidence of PW.35 and Ex.D6 clearly shows that, CBI Officer had sent report to the Chief Vigilance 44 Spl.C.C.No.5/2010 Officer, Vijaya Bank along with all the relevant documents. PW.35 has gone through the entire materials and considered all the relevant documents, and issued sanction order. In the cross-examination of PW.35 nothing is elicited to show that no relevant and necessary documents were sent to the Chief Vigilance Officer, Vijaya Bank for according sanction to prosecute accused No.1. As I have already stated nothing is elicited in the cross-examination of PW.35 to show that he has issued the sanction order without application of mind.
Counsel for accused No.1 has relied upon some decisions, i.e., 2015 (1) SCC (Crl.) 344 (Central Bureau of Investigation vs. Ashok Kumar Agarwal), AIR 2010 SC 259 (Rajendra Agriculture University vs. Ashok Kumar Prasad and others), 2004 (2) KCCR 1233 (D. Rajendran Vs. State by Police Inspector, BOI), and 2015 SAR (Crl.) 939 (Nanjappa vs. State of Karnataka (Supreme Court), and also produced Xerox copy of the order passed in Criminal Appeal No.933 c/w 835/2010 by the Hon'ble 45 Spl.C.C.No.5/2010 High Court of Karnataka, Bengaluru. I have perused the said authorities.
Considering the facts and circumstances and Ex.P255 sanction order and other documents stated above, and the evidence of PW.35, and in view of the discussion made above, with due respect to the above citations, I hold that the said citations do not come to the aid of the accused No.1.
PW.35 - K. Jayakara Shetty, being a competent authority had issued sanction order on 17.12.2009 as per Ex.P255 to prosecute the accused No.1 and the said sanction order is valid one. The prosecution has proved that there is a valid sanction order to prosecute the accused No.1 for the offences alleged in the charge- sheet. Hence, I answer the Point No.1 in the affirmative.
23. POINT NOs.2 to 6 :- These points are related to each other, and hence, they are taken up together for discussion in order to avoid repetition of discussions.
46 Spl.C.C.No.5/2010
24. The case of the prosecution is that on 08.08.2007 a Current Account was opened in the name of M/s. Stratycon Technologies Pvt. Ltd., at Vijaya Bank, Koramangala Branch, Bengaluru. Accused Nos.2 and 3 were the authorized signatories for operating the said account. Accused No.1 had extended 'TOD' of Rs.10,07,645/- on 14.08.2007, i.e. within a week from the date of opening of the current account. He had extended 'TOD' up to Rs.13,99,495/-, and the same was grossly in excess of his delegated financial powers. The 'TOD' beyond Rs.10 lakhs was to be reported to the Regional Manager, Vijaya Branch, Regional Office, Bengaluru (South). But he had concealed the 'TOD' extended in excess of his delegated powers in gross violation of the procedures prescribed for the same. It is further case of the prosecution that on 13.08.2007 accused Nos.2 and 3 have submitted an application seeking secured term loan of Rs.65 lakhs and overdraft limit of Rs.35 lakhs in the name of said company - M/s. Stratycon Technologies Pvt. Ltd., for the purpose of purchase of computer hardware and for meeting working 47 Spl.C.C.No.5/2010 capital requirements. The said company - M/s. Stratycon Technologies Pvt. Ltd., had offered properties No.32 and 88 situated at Sree Hanuman Township, Yadavanahalli Village, Attibele Hobli, Anekal Taluk, Bengaluru District as collateral securities for the said loan. Property No.32 held in the name of K. Shashi Kiran, resident of Tyagarajanagar, Bengaluru, and property No.88 held in the name of Veeresham, resident of Dollars Colony, Bengaluru. Accused No.1 had sanctioned secured term loan of Rs.30 lakhs on 11.09.2007. The borrower had submitted quotations of M/s. S.L.V. Solutions, No.34, 1st Floor, 3rd Cross, 10th Main, Banashankari III Stage, Bengaluru and M/s. Vignesh Techno Services, No.599, 8th Block, Koramangala, Bengaluru, regarding the supply of computer hardware/software. The said amount of Rs.30 lakhs came to be disbursed in favour of the above said two firms and in favour of M/s. Impact Securitas, No.606, 6th Floor, A-Wing, Mittal Towers, M.G. Road, Bengaluru. Out of the said sanction amount of Rs.30 lakhs, the bank had issued a demand draft for Rs.17,94,000/- on 11.09.2007 in favour of M/s Vignesh Techno Services 48 Spl.C.C.No.5/2010 (VTS), and the same came to be deposited in the current account held in the name of 'VTS' at Bank of Baroda, BTM Layout Branch, Bengaluru on 12.09.2007. The said 'VTS' is a non existing firm held in the name of Vinay K.R. (accused No.4). The said 'VTS' had not supplied any computer hardware/software against the quotation/invoice submitted to M/s. Stratycon Technologies Pvt. Ltd., Bengaluru. A cheque bearing No.235954 dated 12.09.2007 for Rs.17,94,000/- was issued in favour of M/s. Stratycon Technologies Pvt. Ltd., came to be deposited in the current account held at Bank of Baroda, BTM Layout Branch, Bengaluru. Thus, accused Nos.2 and 3 had fraudulently obtained Rs.17,94,000/- from Vijaya Bank, Koramangala Branch, Bengaluru. The said bank had issued a demand draft on 11.09.2007 for Rs.2,43,984/- in favour of M/s. SLV Solutions, and the same was deposited in current account held at Corporation Bank, Padmanabha Nagar Branch, Bengaluru. The said M/s. SLV Solutions is a non- existing firm held in the name of Ramaiah Shetty (accused No.3), and the said firm had not supplied any 49 Spl.C.C.No.5/2010 computer hardware/software against the quotation/invoice submitted to the bank. A cheque bearing No.247576 dated 12.09.2007 for Rs.2,43,364/- was issued in favour of M/s. Stratycon Technologies Pvt. Ltd., and the same came to be deposited in the current account held at Bank of Baroda, BTM Layout Branch, Bengaluru. Thus, accused Nos.2 and 3 had fraudulently obtained Rs.2,43,364/- from Vijaya Bank, Koramangala Branch, Bengaluru. On 16.08.2007 (correct date is 16.10.2007), the said bank had issued a cheque bearing No.244905 for Rs.9,62,016/- in favour of M/s. Impact Securitas, and the same was deposited in current account held in the name of M/s. Impact Securitas, at State Bank of India, Church Street Branch, Bengaluru. Two cheques bearing No.981842 for Rs.7 lakhs, and cheque bearing No.981843 for Rs.2,60,000/- both dated 17.10.2007 were issued in favour of M/s. Stratycon Technologies Pvt. Ltd., and the same came to be deposited in current account held at Vijaya Bank, Koramangala Branch, Bengaluru. There was no underlying business transactions between the two 50 Spl.C.C.No.5/2010 companies, and accused No.2 had got the entire amount disbursed in favour of M/s. Impact Securitas transferred in favour of his company with the help of G.R. Nagabhushana (Pw.22), Proprietor of M/s. Impact Securitas. Accused No.1 had not entrusted the loan application of M/s. Stratycon Technologies Pvt. Ltd., to the two officers working in the Advances Section of said Vijaya Bank for appraisal, and himself had dealt with the matter, and he had prepared an appraisal note and had obtained the signatures of the said two officers on the same after the sanction and disbursal of the loan. He had not created equitable mortgage in respect of two properties Nos.32 and 88, which were offered as collateral securities against the said loan in favour of the bank on the date of disbursal of the loan. However, he had created equitable mortgage of the said properties in favour of the Bank on 12.12.2007 i.e., after sanction and disbursal of the loan. No charge was created on the fixed assets of the company on the records of the Registrar of Companies, Kendriya Sadan, Koramangala, Bengaluru. 51 Spl.C.C.No.5/2010
It is further case of the prosecution that on 30.10.2007 accused No.1 had sanctioned Cash Credit (misc.) limit of Rs.60 lakhs against the existing collateral securities and he had sanctioned additional limit of Rs.40 lakhs on 11.03.2008, and further limit of Rs.50 lakhs on 13.03.2008 without obtaining applications from the borrower, and additional securities against the same. He had allowed the borrowings to exceed the total sanction limit of Rs.150 lakhs without sanctioning additional limits. He had not entrusted the loan application submitted by M/s. Stratycon Technologies Pvt. Ltd., Bengaluru to the two officers working in the Advances Section of Vijaya Bank, Koramangala Branch, Bengaluru for appraisal. He had prepared an appraisal note subsequently, and had obtained the signatures of two officers of said Vijaya Bank. The above said amount of Rs.60 lakhs was sanctioned on 30.10.2007 against the two properties which were taken as collateral security in respect of the loan of Rs.30 lakhs. The said properties were highly inadequate for covering the total exposure of Rs.90 lakhs (Rs.30 lakhs secured loan and Rs.60 lakhs cash credit 52 Spl.C.C.No.5/2010 (miscellaneous). The said cash credit was sanctioned for meeting the working capital requirement of said company
- M/s. Stratycon Technologies Pvt. Ltd. But the entire amount was utilized for meeting outstanding liabilities with other individuals/institutions/banks and partly received by the directors/accused Nos.2 and 3 themselves. The loan amount was fraudulently taken away through the A/cs held in the name of M/s. SLV Solutions, M/s. Sree Durga Enterprises, M/s. Vignesh Techno Services, and M/s. Sughosh Advertising etc. A cheque bearing No.925244 for Rs.60,07,020/- was issued on 26.03.2008 in favour of M/s. Sughosh Advertising, and the same came to be deposited in the account held at Corporation Bank, BTM Layout Branch, Bengaluru. M/s. Sughosh Advertising is a non existing firm and the same was being operated by accused No.5 - Smt. Greeshma, Assistant (HR) of M/s. Stratycon Technologies Pvt. Ltd., Bengaluru. The entire loan amount was used for personal benefits, purchase of properties, and for meeting the outstanding liabilities of accused Nos.2 and 3 53 Spl.C.C.No.5/2010 (who are the directors of the company) in various banks/institutions/individuals.
It is further case of the prosecution that on 07.02.2008 the bank had sanctioned secured loan of Rs.60 lakhs in the name of M/s. Stratycon Technologies Pvt. Ltd., for the purpose of purchase of GSM Software, and Home Automation Systems with Accessories, and Rs.60 lakhs came to be transferred in favour of Cash Credit (Misc.) Account of M/s. Stratycon Technologies Pvt. Ltd., held at Vijaya Bank, Koramangala Branch, Bengaluru on 07.02.2008. The said amount was further transferred to current account of M/s. SLV Solutions, No.66, BHECS Layout, 2nd Main, BTM Layout, 2nd Stage, Bengaluru held at State Bank of India, J.P. Nagar Branch Bengaluru through RTGS. Said M/s. SLV Solutions is a non-existing firm held in the name of Ms. Vidya Lakshmi D/o Ramaiah Setty (accused No.3). Said Ms. Vidya Lakshmi had opened a current account in the name of said firm on 23.01.2008 i.e., just about 15 days prior to sanction of said loan of Rs.60 lakhs and the firm had not supplied any computer hardware/software against the 54 Spl.C.C.No.5/2010 payment, and the entire amount was withdrawn in cash by accused Nos.3 -Ramaiah Setty and accused No.4 - Vinay K.R. The property situated at No.50/1, Kailasanahalli, Jigani Hobli, Anekal Taluk, Bengaluru District offered as security to the said loan, and it was held in the name of Sri. Veerasham resident of No.15/1, 3rd Main, NT Pet, Bengaluru. No equitable mortgage of the said property was created in favour of the bank, and the original title of the property came to be returned during the pendency of the repayment of loan, thereby leaving the loan totally unsecured. Totally there is an outstanding of Rs.4,41,97,083/- in the aforesaid four accounts as on 28.12.2008.
It is further case of the prosecution that accused No.1 - Sri. Radhakrishna Shetty being the Branch Head of Vijaya Bank, Koramangala Branch, Bengaluru had dominion over the money of the Bank, and he was to lend the said money in accordance with the procedure prescribed for the same. But he had entered into a criminal conspiracy with accused No.2 and other accused persons in the matter of sanction and disbursal of various 55 Spl.C.C.No.5/2010 credit facilities in the name of M/s. Stratycon Technologies Pvt. Ltd., and in furtherance of the said conspiracy various credit facilities were extended in favour of the company based on the forged and fabricated documents in gross violation of procedures prescribed for the same, thereby committed criminal breach of trust and criminal misconduct. The said amounts were fraudulently siphoned off by accused Nos.2 and 3 by forging the bills/invoices regarding supply of computer hardware/software in the name of four fictitious/non-existing firms without creating tangible assets against the loan, thereby causing a loss of Rs.4,41,97,083/- to the Vijaya Bank, Koramangala Branch, Bengaluru, and corresponding gain for themselves. Accused Nos.4 - Vinay K.R. and accused No.5 - Smt. Greeshma H.G., had actively participated in the cheating by carrying out transactions in the name of two non-existing firms. Thus accused Nos.1 to 5 have committed the alleged offences. The accused persons have denied the same.
56 Spl.C.C.No.5/2010
The defence of accused No.1 is that he has been wrongly implicated even though there was valid banking transaction done by him. He has been wrongly implicated in this case instead of implicating concerned officials in case there was any offences. Just because the loan became bad, he has been falsely implicated even though he has not committed any offence (cross- examination of PW.41 - Jaboy K.R., Inspector of Police, CBI-ACB, Bengaluru, para 9 and 10 at page 54). The defence of accused Nos.2 to 5 is that they were correctly used the funds for the purpose for which it was sanctioned. Since the business plan did not workout. M/s. Stratycon Technologies Pvt. Ltd., had sustained loss (cross-examination of PW.3 Sri. B. Gurudath Shenoy, Assistant General Manager, Vijaya Bank, page 33). M/s. Stratycon Technologies Pvt. Ltd., had applied for loan by giving all necessary genuine documents to the bank, and bank scrutinized all the documents, and after satisfaction, the loan was granted, and the said company has utilized entire loan amount for the purpose for which it was sanctioned. Due to loss in the business, the said 57 Spl.C.C.No.5/2010 company had sustained loss (cross-examination of PW.31-B. Rajagopal Rai, Chief Manager, Vijaya Bank, para 4 at page 12, 13, and 14). All transactions done by the said company are genuine transactions, and invoices and quotations given by the said company to Vijaya Bank, Koramangala Branch are all genuine documents. False charge-sheet has been filed against them even though said company has done correct business regarding purchase of software equipments as per the invoice and quotations furnished to the bank. They are innocent persons. False charge-sheet filed even though they have not committed any offences as alleged in the charge sheet (cross-examination of PW.41, page 77). There is no evidence by accused No.1, and 2 to 5 to prove the said defence.
25. Counsel for the accused No.1 has argued that M/s. Stratycon Technologies Pvt. Ltd., company is the borrower, but the borrower has not been made as an accused. There is allegation of criminal conspiracy (Section 120-B of IPC) against accused Nos.1 to 5, and in furtherance of the said conspiracy they have committed 58 Spl.C.C.No.5/2010 other offences stated in the charge sheet. If there is any conspiracy by the accused No.1, it is only with the borrower and not with others, but the company is not arrayed as an accused. In the absence of the company/borrower, criminal conspiracy does not exists, consequently, there is no basis to say that in furtherance of the criminal conspiracy, the accused persons have committed the alleged offences. He has further contended that in the absence of the said company as an accused, the accused persons cannot be joined to the allegation of conspiracy, and the accused persons are not vicariously liable for the act of the company as there is no principle of vicarious liability either in the IPC or in P.C. Act 1988. He has relied on some decisions. Counsel for accused Nos.2 to 5 has also contended that the accused Nos.2 to 5 are not vicariously liable for the act of the company or the offences committed by the company as there is no principles of vicarious liability either in the IPC or in P.C. Act 1988. They haves relied on some decisions.
59 Spl.C.C.No.5/2010
Counsel for accused No.1 is relying on the following decisions :-
(1) AIR 2005 SC 2622 (Standard Chartered Bank and others V/s. Directorate of Enforcement and others) Criminal prosecution - No immunity to companies from prosecution merely because it is in respect of offences for which punishment of imprisonment is mandatory-In such cases in lieu of imprisonment, fine can be imposed - Also word "person" in S.11, Penal Code and S.3(42), General Clauses Act includes any company or association or body of persons.
Foreign Exchange Regulation Act(46 of 1973), S.56(I)(ii).
Income-tax Act (43 of 1961), Ss.276-C, 278-B(as amended by Finance(No.2) Act, 2004) General Clauses Act (10 of 1897), S.3(42).
(2) AIR 2012 SUPREME COURT 2795 (Aneeta Hada V.M/s Godfather Travels & Tours Pvt. Ltd.,) (A) Company - Not immune from criminal liability - Plea that company cannot possess necessary criminal intent - Not tenable as criminal intent of persons guiding company gets imputed to company.
60 Spl.C.C.No.5/2010(3) (2015) 2 Supreme Court Cases (Cri) 687 (Sunil Bharti Mittal V/s Central Bureau of Investigation) It is observed in para 42, 43 and 44 as follows :-
"No doubt, a corporate entity is an artificial person which acts through its officers, Directors, Managing Director, Chairman, etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically invoking such a provision. When the company is the offender, vicarious liability of the Directors cannot be imputed automatically, in the absence of any statutory provision to this effect. One such example of vicarious liability of Director is Section 141 of the N.I. Act.
(Counsel for accused Nos.2 to 5 has relied on the same decision, but produced internet copy).
Counsel for accused Nos.2 to 5 is relying on the following decisions :-61 Spl.C.C.No.5/2010
(1) (2008) 5 Supreme Court cases 662 (S.K. Alagh V/s State of Uttar Pradesh and others) A. Penal Code, 1860 - Ss.405 and 406 -
Criminal breach of trust - Ingredients of - Whether on facts made out- Vicarious liability, held, cannot be fastened on MD, Director or other officers of a Company which is accused of commission of offence under S.406 -
Complainant, wholesale dealer of a Company, after termination of dealership by the Company, sent demand drafts to the Company for supply of goods - Demand made by complainant for supply of goods on ground that dealership was subsequently reiterated by the Company - Proprietor of the dealer firm thereafter filed a complaint before CJM alleging commission of offence under S.406 by the Company and its MD, the appellant, on ground that the Company with mala fide intention neither supplied the goods nor returned the money - Application filed by appellant under S.482 Cr.P.C. for quashing the criminal proceedings by High Court dismissed holding that prima facie offence under S.406 was made out against appellant.- Held, complaint petition, even assuming to be correct in its entirety, did not disclose an offence under S.406 against appellant - Vicarious liability cannot be cast on appellant MD for alleged offence committed by the Company.
B. Penal Code, 1860 -Ss.34,146 to 149
- Vicarious liability - Code does not cast vicarious liability on a party not directly charged for commission of an offence, unless specifically provided therefore.
62 Spl.C.C.No.5/2010(Counsel for accused No.1 has also relied on the same decision, which is reported in AIR 2008 SC 1731).
(2) (2008) 5 Supreme Court Cases 668 (Maksud Saiyed V/s State of Gujarat and others).
B. Criminal Law - Vicarious liability of Directors for the charges leveled against the Company - Untenability of - Absence of requisite allegation with regard to correct statutory provision - Held, the Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company when the accused is a Company - Magistrate should have examined whether the complaint made the Directors personally liable - Penal Code, 1860, Ss.120-B, 177, 181, 191, 192, 425 and 500 - Company Law - Directors -
Vicarious criminal liability of.
Public Prosecutor has contended that even though borrower is the company i.e., M/s. Stratycon Technologies Pvt. Ltd., accused No.1 (Branch Head of Vijaya Bank) had made criminal conspiracy with accused Nos.2 and 3, who are the Directors of the said company, and other accused persons (accused Nos.4 and 5), and in furtherance of the said criminal conspiracy, they have committed the alleged offences. Hence, the company has not been made as an accused. Non-arraying of the 63 Spl.C.C.No.5/2010 said company as an accused, is not fatal to the case of the prosecution.
26. It is stated in page 8 and 9 of the charge- sheet that accused No.1 had sanctioned secured loan of Rs.30 lakhs to M/s. Stratycon Technologies Pvt. Ltd., on 11.09.2007 for purchase of computers from M/s. Vignesh Techno Services and two other firms, and he had sanctioned cash credit (miscellaneous) limit of Rs.60 lakhs on 30.10.2007 for purchase of software development, and he had sanctioned another secured loan of Rs.60 lakhs on 07.02.2008 in favour of M/s. Stratycon Technologies Pvt. Ltd., Bengaluru for purchase of modem and software solutions from M/s. SLV Solutions, Bengaluru, and also stated that accused No.1 had allowed temporary over draft in the current account of said M/s. Stratycon Technologies Pvt. Ltd. It is further stated that accused No.1 had entered into criminal conspiracy with accused No.2 - Sri. Mithun Narayan, Chief Executive of said company, and in furtherance of the said criminal conspiracy, sanctioned and disbursed Rs.150 lakhs and allowed 'TOD' in excess of sanctioned 64 Spl.C.C.No.5/2010 limits against insufficient primary/collateral securities, thereby causing loss of Rs.419.68 lakhs to Vijaya Bank, Koramangala Branch, Bengaluru and corresponding gain to the private persons. It is stated in page 16 of the charge-sheet that accused No.1 was serving as Branch Head of Vijaya Bank and had dominion over the money of the bank and was to lend the said money in accordance with the procedure prescribed for the same. However, he had entered into criminal conspiracy with accused No.2 and others in the matter of sanction and disbursal of various credit facilities in the name of said company, and in furtherance of the said criminal conspiracy various credit facilities were extended in favour of the company on the basis of forged and fabricated documents in gross violation of procedures prescribed for the same, there by committed criminal breach of trust and criminal misconduct. It is relevant to state that it is nowhere stated in the charge sheet that accused No.1 had committed criminal conspiracy with the said company, and in furtherance of the said criminal 65 Spl.C.C.No.5/2010 conspiracy with the said company, he had sanctioned and disbursed various loan facilities to the said company.
It appears from the charge-sheet that there is no allegation of criminal conspiracy against the said company, and in furtherance of the said criminal conspiracy, the said company and accused persons have committed the alleged offences. The evidence of PW.3 - B. Gurudath Shenoy, the then Chief Manager, Central Inspection Department, Vijaya Bank, PW.7 - Jagadeesh Shetty, the then Loan Officer of Vijaya Bank, Koramangala Branch, PW.26 - Rajaram Khandige, and the evidence of some other witnesses show that the above said loan facilities were granted in the name of M/s. Stratycon Technologies Pvt. Ltd. PW.41 - Jaboy K.R., Inspector of Police, CBI-ACB, Bengaluru (I.O.) has deposed in the cross-examination in para 2 at page 25 that he has filed the charge-sheet before the Court and his investigation revealed that the borrower - M/s. Stratycon Technologies Pvt. Ltd., is not made as an accused in this case.
66 Spl.C.C.No.5/2010
It is clear from the above discussions that there is no dispute that M/s. Stratycon Technologies Pvt. Ltd., has borrowed the loan and got various credit facilities from Vijaya Bank. In other words, said company is the borrower, but the said company is not made as an accused.
If the company has committed the alleged offences, then it is necessary to array the company as an accused, otherwise, there is no necessity to array the company as an accused.
27. Said Vijaya Bank had granted loan to M/s. Stratycon Technologies Pvt. Ltd. In other words, the said company is the borrower. As I have already stated as per the charge-sheet accused No.1 had made criminal conspiracy with accused No.2 and other accused persons, but not with the company. According to the prosecution, said company has not committed the alleged offences, and said offences committed by the accused persons. I have already stated the defence of the accused persons. It is the defence of accused No.1 that he has been 67 Spl.C.C.No.5/2010 wrongly implicated in this case even though there was valid banking transactions done by him, and he is wrongly implicated instead of implicating concerned officials in case there was any offence. Just because the loan became bad, he has been falsely implicated even though he has not committed any offences. The defence of accused Nos.2 to 5 is that they were correctly used the funds/loan amount for the purpose for which it was sanctioned. Since the business plan did not workout, M/s. Stratycon Technologies Pvt. Ltd., had sustained loss. The said company had applied for loan by giving all necessary genuine documents to the bank, and bank scrutinized all the documents, and after satisfaction, the loan was granted, and the said company has utilized entire loan amount for the purpose for which it was sanctioned. Due to loss in the business, the said company had sustained loss. All transactions done by the said company are genuine transactions, and invoices and quotations given by the said company to Vijaya Bank, Koramangala Branch are all genuine documents. False charge sheet has been filed against them, even 68 Spl.C.C.No.5/2010 though said company had done correct business regarding purchase of software equipments as per the invoice and quotations furnished to the bank. They are innocent persons. False charge sheet is filed even though they have not committed any offences as alleged in the charge sheet. But there is no evidence by accused No.1, and 2 to 5 to prove the said defence.
28. It is not the defence of the accused persons in the cross-examination of prosecution witnesses that the company had committed the alleged offences, and hence, they are not vicariously liable for the act of the company as there is no provision of vicarious liability in the IPC or P.C. Act. On the other hand, the defence of the accused persons is that the company has made genuine transactions with the bank, and the invoices and quotations given by the said company to the Bank are all genuine documents. It is clear from the defence of the accused persons that said company has not committed the alleged offences. In other words, it is not the case of the prosecution or any of the accused persons that the said company had committed the alleged offences. 69 Spl.C.C.No.5/2010 Hence, there is no necessity to array the said company as an accused.
If really the said M/s. Stratycon Technologies Pvt. Ltd., has committed the alleged offences, and the company is liable to suffer imprisonment as per law, the accused persons could have file an application before the Court to discharge them as they are not vicariously liable for the act of the said company or they could have file application for discharge them on the ground that they could not be prosecuted without arraying the said company as an accused. But they have not filed any applications on these grounds.
29. In S.K. Alagh's case [(2008) 5 Supreme Court cases 662] referred above held that "vicarious liability cannot be fastened on MD, Director or other officers of a Company, when the offences committed by the company." In Maksud Saiyed's case [(2008) 5 Supreme Court Cases 668] referred above held that "Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the 70 Spl.C.C.No.5/2010 Directors of the Company when the accused is a Company." In Sunil Bharati Mittal's case [(2015) 2 Supreme Court Cases (Cri.) 687] referred above held that "when the company is the offender, vicarious liability of the Directors cannot be imputed automatically in the absence of any statutory provision to this effect."
In the case on hand, as I have already discussed in detail and stated that the said M/s. Stratycon Technologies Pvt. Ltd., has not committed any offences and it is not an accused in this case. Hence, the question of vicarious liability on the directors of the company or other officer of the company or other concerned persons does not arise. Under these circumstances, with due respect to the above decisions I hold that the above said decisions (relied upon the by accused persons) does not come to their help.
30. According to the prosecution, the accused persons have committed the alleged offences. The burden is on the prosecution to prove the said offences. 71 Spl.C.C.No.5/2010
Counsel for accused No.1 has contended that Ex.P1- Investigation Report dated 14.11.2008 submitted by the Investigation officer of the Vijaya Bank is the certified copy i.e., Xerox copy attested as certified copy. It is secondary evidence which is not admissible in the evidence. The prosecution has not laid foundation to produce the secondary evidence. Said investigation report is basis for lodging the complaint by PW.1, and said complaint is basis for FIR (Ex.P310). The said Ex.P1- investigation report cannot be relied upon as it is secondary evidence. He is relying on the following decisions.
It is held in ILR 1988 Karnataka 3347 (Avalappa vs. Krishnappa) that "conditions stated in Section 65 of the Evidence Act, 1872 has to be fulfilled before secondary evidence can be admitted and case for producing secondary evidence should be made out by laying foundation for it, and if foundation laid that original is lost or in custody of adversary failing to produce notwithstanding notice secondary evidence admissible." 72 Spl.C.C.No.5/2010
In 2013 SAR (Criminal) 1031 (Kaliya vs. State of M.P.) (Supreme Court) held that "Secondary evidence can be adduced relating to a document when the original has been destroyed or lost or when the party offering evidence of its contents cannot for any other reason, not arising from his own default, or neglect, produced it in reasonable time. The secondary evidence of an ordinary document is admissible only and only when the party desirous of admitting it has proved before the Court that it was not in his possession or control of it and further, that he has done what could be done to procure the production of it. Thus, the party has to account for the non-production of one of the ways indicated in Section 65 of the Act. Party further has to lay down the factual foundation to establish the right to give secondary evidence where the original document cannot be produced."
It is further held that "when party gives in evidence a certified copy/secondary evidence without proving the circumstances entitling him to give secondary evidence, the opposite party must raise an objection at the time of admission. In case, an objection is not raised at that point of time, it is precluded from being at a belated stage, and mere admission of a document does not amount to its proof, nor mere marking of exhibit on a document does not dispense with its proof, which is otherwise required to be done in accordance with law." 73 Spl.C.C.No.5/2010
31. In the case on hand, PW.1 - K. Shantharama Kamath, Retired General Manager, Vijaya Bank, Bengaluru is the complainant. He has stated in the evidence that from 15.10.2007 to 31.07.2011 he worked as General Manager, Vijaya Bank, Head office, Bangalore. In the year 2008 he received a report from Regional Office, Bangalore regarding the irregularities at Koramangala Branch of Vijaya Bank allegedly committed by accused No.1, Branch Manager of the said Koramangala Branch, and thereafter he ordered for investigation into the matter, and Mr. Gurudatta Shenoy, Chief Manager of the Inspection Department conducted the investigation. He submitted his report on 14.11.2008 to him (PW.1). Certified copy of the said report is marked as Ex.P1. It consisting of 38 sheets. At this stage, it is relevant to state that counsel for the accused persons have not raised any objections to admit the said document in evidence, and marked the same as Ex.P1.
He has further deposed that on the basis of the said report he has lodged the complaint before CBI, Bengaluru. Copy of the complaint dated 05.12.2008 is 74 Spl.C.C.No.5/2010 marked as Ex.P2, and his signature is marked as Ex.P2(a). It appears from the evidence of PW.41 that the original complaint dated 05.12.2008 is marked as Ex.P2(b) and copy of FIR R.C.No.2008 is marked as Ex.P310.
Ex.P1 is the certified copy and it is secondary evidence. The prosecution has not laid any foundation to produce this document as secondary evidence. It is clearly stated in Kaliya's case referred above that "when party gives in evidence a certified copy/secondary evidence without proving the circumstances entitling him to give secondary evidence, the opposite party must raise an objection at the time of admission. In case, an objection is not raised at that point of time, it is precluded from being at a belated stage."
In the case on hand, counsels for the accused persons have not at all raised any objections while admitting the investigation report in evidence and marking as an Ex.P1. Now they cannot contend that the said document is not admissible in evidence as it is 75 Spl.C.C.No.5/2010 secondary evidence and cannot be relied upon it. Contention of the counsel for the accused No.1 that said document cannot be looked into or considered is not sustainable.
32. Offences alleged against the accused persons are Section 120-B read with 409, 420, 468 and 471 of IPC and Section 13(2) read with Section 13(1) (d) of P.C. Act.
Section 120-B of IPC is punishment section for criminal conspiracy. Section 120-A is definition of criminal conspiracy. This section says that "when two or more persons agree to do, or cause to be done, -
(1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy.
Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof."
33. Public Prosecutor has argued that in case of criminal conspiracy it is difficult to get the direct evidence. Criminal conspiracy can be proved by direct 76 Spl.C.C.No.5/2010 evidence or circumstantial evidence and by necessary implication. He is relying on the following decisions:-
In (2013) 2 Supreme Court Cases 162 (N.V. Subba Rao Vs. State Through Inspector of Police, CBI/SPE, Visakhapatnam, Andhra Pradesh) observed that :-
"essentials of criminal conspiracy is meeting of minds of two or more persons for doing or causing to be done an illegal act or an act by illegal means. Conspiracy is hatched in secrecy and for proving same substantial direct evidence may not be available. Hence, criminal conspiracy can be proved by circumstantial evidence."
In (2010) 1 Supreme Court Cases (Cri.) 164 (R. Venkatkrishnan vs. Central Bureau of Investigation) observed that :-
"Criminal conspiracy is an offence which is independent of other offences. It takes place when there is an agreement to do or cause to be done an illegal act, or an act which may not be illegal but by illegal means. In the absence of agreement, mere thought to commit a crime does not constitute offence. Conspiracy is generally hatched in secrecy. Direct evidence is therefore, difficult to become available. Criminal conspiracy can be proved on the basis of circumstantial evidence and /or by necessary implication. Smaller conspiracy may be a part of larger conspiracy."77 Spl.C.C.No.5/2010
In (2010) 2 Supreme Court Cases (Cri.) 718 (Mir Nagvi Askari vs. Central Bureau of Investigation) observed that :-
"Criminally conspiracy involves meeting of minds of two or more persons for doing or causing to be done an illegal act or an act which may not be illegal but by illegal means. The offence takes place with the meeting of minds even if nothing further is done. It is an offence independent of other offence and is punishable separately. Criminal conspiracy is generally hatched in secrecy. Direct evidence is therefore difficult to obtain or access. The offence can be proved by adducing circumstantial evidence and/or by necessary implication.
(These decisions are on the offences under Sections 120- B, 405, 409, 410, 420, 468, 471 of IPC and Section 13(2) r/w 13(1)(d) of P.C. Act).
In these cases loan transactions took place with the bank by its customers/loanee.
Secured loan of Rs.30,00,000/-:-
34. (a). In the case on hand on 13.08.2007, accused No.2 - Mithun Narayana, Managing Director, and accused No.3 - Ramaiah Setty, Director of M/s. Stratycon Technologies Pvt. Ltd., have applied for loan in Vijaya Bank, Koramangala Branch. It appears from 78 Spl.C.C.No.5/2010 Ex.P68 loan application that they applied for over draft of Rs.35 lakhs for payment of salary and other administrative expenses and debts, and for term loan of Rs.65 lakhs for purchasing computers.
Accused No.1 - Radhakrishna Shetty was working as Branch Head in the said Bank for the period from 03.02.2007 to 23.08.2008.
Ex.P89 is an appraisal note dated 11.09.2007 prepared for sanctioning of said loan. It appears from Ex.P89 that there is a recommendation to sanction secured loan of Rs.30 lakhs only, but there is no order of sanction of secured loan of Rs.30 lakhs. However, said bank intimated accused No.2 about sanction of secured loan of Rs.30 lakhs. Ex.P22 is the sanction communication letter. Accused No.2 has signed this letter. In this letter not stated that on what date said loan was sanctioned. It is stated that the mode of disbursement is direct payment to the suppliers. Accused No.1 disbursed the loan of Rs.17,94,000/- on 11.09.2007, Rs.2,43,984/- on 11.09.2007, and 79 Spl.C.C.No.5/2010 Rs.9,62,016/- on 16.08.2007 (correct date is 16.10.2007).
34.(b). Ex.P89 is the note for Chief Manager, A/c., M/s. Stratycon Technologies Pvt. Ltd. It is stated in the evidence that this document is appraisal note/process note.
In page 8 of Ex.P89 under heading "Present Proposal" stated that "the company has applied for secured loan of Rs.30 lakhs for the purchase of computer hardware and the Server for the growing business of the company in a new concept for the present generation for a total cost of Rs.36.23 lakhs against the collateral security of two land and building totally valued at Rs.35.36 lakhs as per the valuation report of K. Udaya Kumar Shetty dated 16.11.2007."
Ex.P72 is the Valuation Report prepared by Sri. K. Udaya Kumar Shetty, Approved Valuer for Banks, Bengaluru. It appears from this document that he valued the property i.e., site No.32, Khata No.800/32 in Sy.No.38/1 of Yadavanahalli Village, Neralur Panchayath, 80 Spl.C.C.No.5/2010 Attibele Hobli, Anekal Taluk, Bengaluru District. It is known as 'Sri Hanuman Township.' This property belongs to one K. Shashi Kiran. It is stated in this document that said peroperty inspected on 25.10.2007, and the property valued at Rs.15,18,937/- and it is rounded off to Rs.15,19,000/- on 26.10.2007. Ex.P73 is the Inspection report relating to this property. It appears that Assistant Branch Manager/Manager/second line officer, and Branch Head have signed this document.
Ex.P74 is the valuation report prepared by K. Udaya Kumar Shetty. It is relating to Site No.88, Sri Hanuman Township, Khata/House List No.821/88, Neraluru Panchayath, Anekal Taluk, Attibele Hobli, Bengaluru District. This property belongs to one Veeresham. It appears that said property inspected on 15.11.2007, and property valued on 16.11.2007 at Rs.20,16,725/- and it is rounded off to Rs.20,17,000/-.
Ex.P75 is the inspection report relating to this property. It appears that said property inspected on 81 Spl.C.C.No.5/2010 15.11.2007. Assistant Branch Manager/Manager/second line officer, and Branch Head have signed this document.
The total value of these two properties is Rs.35,36,000/-
34.(c). PW.27 - K. Udaya Kumar Shetty has deposed in evidence in respect of these documents. PW.7-Jagadeesh Shetty has deposed that he worked as Loan Officer in Vijaya Bank, Koramangala Branch, Bengaluru from 26.06.2008 to 31.03.2010. He further deposed that he visited the said property i.e. Site No.32 on 25.10.2007 along with valuer, and also inspected another property i.e., site No.88 on 16.11.2007. He deposed about these documents i.e., Ex.P72, 73, 74 and
75. Accused No.1 has taken these properties as collateral security to the above said secured loan of Rs.30 lakhs. It is relevant to state that in first page of Ex.P89- Appraisal Note it is stated that the date of receipt of proposal is 13.08.2007. Date of receipt of full particulars is 01.09.2007. This appraisal note - Ex.P89 is 82 Spl.C.C.No.5/2010 prepared on 11.09.2007, and recommended for sanctioning secured loan of Rs.30 lakhs and placed it before BLCC (Branch Level Credit Committee) for clearance, and it is signed by Jagadeesh Shetty, Manager (Loans), Mrs. Jayashree, Manager, and Chief Manager - Accused No.1- Radhakrishna Shetty. It is not possible to prepare this appraisal note on 11.09.2007, because the above said properties were taken as collateral securities on 26.10.2007 and 16.11.2007. This appraisal note could not be prepared without inspecting the said properties (which offered as collateral security) and assess the said properties. As I have already stated these properties were inspected on the dates stated above, and one property valued on 26.10.2007 and another property valued on 16.11.2007. That means to say said properties valued after more than 1½ months from 11.09.2007. As I have already stated secured loan amount of Rs.30 lakhs disbursed on 11.09.2007 and 16.10.2007.
34.(d). PW.9 -D.C. Krishnappa, Chief Manager, Vijaya Bank, Mysuru has deposed that he was working as 83 Spl.C.C.No.5/2010 Senior Manager from 16.08.2008 to 05.02.2009 in the Regional Office, Bengaluru. He was promoted as Chief Manager on 05.02.2009.
He deposed in para 10 at page 9 that Ex.P.89 is appraisal note regarding sanction of secured loan of Rs.30 lakhs. The Chief Manager has only put his signature, but he has not written that the loan is sanctioned for such and such an amount. The sanction of secured loan of Rs.30 lakhs stated above was communicated to the borrower as per Ex.P22. Company's balance sheet was not enclosed to the loan application. In para 11 at page 9 he has deposed that Ex.P89 is prepared by Jagadeesh Shetty on 11.09.2007. The figures put in Ex.P89 are not supported by the relevant balance sheet as the balance sheet is not produced. The repayment period mentioned in Ex.P.89 is three years. He has deposed in the cross-examination (para 15 page 13) that the Branch Head has not passed the sanction order, and there is no sanction order number, date and details of interest etc. 84 Spl.C.C.No.5/2010 It is clear from his evidence that Ex.P89 appraisal note prepared and recommended to sanction the secured loan of Rs.30 lakhs to M/s. Stratycon Technologies Pvt. Ltd., and placed it before BLCC. But the said loan was not sanctioned. There is no order or endorsement or note in Ex.P89 that as per the recommendation made in the said appraisal note, said loan was sanctioned by accused No.1-Radhakrishna Shetty, Branch Head (Chief Manager) or his higher officer or by the BLCC. Absolutely no documents to show that the said loan of Rs.30 lakhs was sanctioned, but said loan of Rs.30 lakhs was disbursed on 11.09.2007 and 16.10.2007 as already stated. It is clear that the said loan amount of Rs.30 lakhs released/ disbursed without sanction. It is not possible to release/disburse the loan amount without sanction by the concerned officer of the bank, but in this case the loan amount is disbursed without sanction order. These are all clearly shows that the conduct of accused No.1 - Radhakrishna Shetty is not correct. It appears that in order to facilitate / help M/s. Stratycon Technologies Pvt. Ltd., he has disbursed the loan amount without sanction 85 Spl.C.C.No.5/2010 order for granting the loan. These are all clearly shows that accused No.1 and company directors i.e., accused Nos.2 and 3 colluded and criminally conspired together in releasing the said loan to the company - M/s. Stratycon Technologies Pvt. Ltd.
34.(e). PW.23 -P. Chandra Shekar, Inspector, Regional Inspectorate, Vijaya Bank, Bengaluru has deposed in the evidence that he worked as Senior Branch Manager from 15.05.2008 to 28.08.2008 in Vijaya Bank, Koramangala Branch, Bengaluru. During the above said period, he was looking after the internal functioning of the said Branch. He has deposed (para 7 page 3 and 4) that Ex.P.89 is the appraisal note in respect of sanction of secured loan of Rs.30 lakhs to M/s Stratycon Technologies Pvt. Ltd. He was given a handwritten process note by the Chief Manager Sri Radhakrishna Shetty (accused No.1) and asked him (PW.23) to type the same in the computer system, and he typed the same in the system and the print out was taken and given to Radhakrishna Shetty (accused No.1) along with the manuscript. He has identified the signature of 86 Spl.C.C.No.5/2010 accused No.1. Ex.P.89(c) is the signature of accused No.1. He further stated that even before he typed the said process note, the loan had been already sanctioned and released also in favour of M/s Stratycon Technologies Pvt. Ltd., and the date found in Ex.P.89 is 11.09.2007 as it was the date which was found in the hand written process note given to him for typing, but on 11.09.2007 he was not working in the above said branch. He typed Ex.P89 in the office computer. He does not know about the loan transaction mentioned in Ex.P89 except typing the same in the system.
The above said evidence is not disputed in the cross-examination by the accused persons. No reasons to disbelieve his evidence. He was working in the said bank from 15.05.2008 to 28.08.2008. Ex.P89 got typed by accused No.1 in the system. That means to say Ex.P89 might have prepared on 15.05.2008 or subsequent to that date. That means to say Ex.P89 is prepared after eight months from the date of disbursement of the said loan of Rs.30 lakhs. Even though said Ex.P89 prepared subsequent to 15.05.2008, 87 Spl.C.C.No.5/2010 the date mentioned in Ex.P89 as 11.09.2007 which is false. The date of receipt of full particulars stated in page 1 of Ex.P89 as 01.09.2007 is also false, because the properties which are offered as collateral security to the said loan were valued on 26.10.2007 and 16.11.2007 i.e., more than 1½ months after 11.09.2007. These are all clearly shows that Ex.P.89 is prepared long after disbursement of the above said loan of Rs.30 lakhs. The said loan of Rs.30 lakhs is disbursed without preparing the appraisal note on 11.09.2007 and without sanction order.
34.(f). PW.20 - Smt. Jayashree has deposed in the evidence (para 3 page 2) that according to Ex.P89, the Chief Manager (accused No.1) has sanctioned the secured loan of Rs.30 lakhs to M/s. Stratycon Technologies Pvt. Ltd., and the Senior Branch Manager - P. Chandrashekar (PW.23) had prepared the said Ex.P89. In the process note, it has been recommended that M/s Stratycon Technologies Pvt. Ltd., can be sanctioned secured loan of Rs.30 lakhs. She has identified her signature which is marked as Ex.P89(b). She has 88 Spl.C.C.No.5/2010 deposed that she has signed on the said document along with Sri. Jagadeesh Shetty, Manager (Loans), and the Chief Manager (accused No.1). She has further stated that accused No.1 told her that he has received loan application along with documents from M/s. Stratycon Technologies Pvt. Ltd., and told her that he will sanction the same. She has not seen the loan application and its annexures before she signing on Ex.P89. After the loan proposal only, the processing will be made. She signed the Ex.P89 as she was the Assistant Branch Manager. In cross-examination in para 12 at page 42 she has deposed that Ex.P89 has been prepared by PW.7- Jagadeesh Shetty, who was working as Loan Officer. He is the proper person to give evidence regarding what are all the documents he perused for preparation of Ex.P89 and also about the contents of it. PW.7 can say regarding the risk assessment table mentioned in Ex.P.89 as he has prepared the same.
It is relevant to state that PW.7 has not stated anything about this document. If really, he had prepared this document, he would have deposed regarding the 89 Spl.C.C.No.5/2010 same, but he has not stated anything about this document. On the other hand evidence of PW.23 shows that he prepared Ex.P89. I have already discussed his evidence.
34.(g). PW.41 - Jaboy K.R., Inspector of Police, CBI-ACB, Bengaluru has deposed in the cross- examination (para 14, page 42-43) that the committee of three officials consisting of Jagadeesh Sheety (PW.7), Smt. Jayashree (PW.20) and accused No.1-Radhakrishna Shetty have approved the said loan. Said three officials have prepared Ex.P89 process note and signed the same also. He has stated that PW.7 and 20 are the recommending members and accused No.1 is the competent authority for the loan.
34.(h). Counsel for accused No.1 has contended that accused No.1 has sanctioned the said loan of Rs.30 lakhs to M/s. Stratycon Technologies Pvt. Ltd., on the basis of recommendation made by the committee consisting of PW.7, 20 and accused No.1, and there is no any fault on the part of accused No.1 in disbursing the above said loan of Rs.30 lakhs. It is relevant to state 90 Spl.C.C.No.5/2010 that Ex.P89 prepared subsequent to 15.05.2008, and in this regard I have already discussed the evidence of PW.23 - Chandrashekar. There is no endorsement or note in Ex.P89 as the said loan of Rs.30 lakhs sanctioned by the said committee members, i.e., members of BLCC or accused No.1 or by any of his higher officer.
PW.23 - Chandrashekar had typed Ex.P89 as instructed by accused No.1, and PW.7 and 20 have singed the said document. They were all working under accused No.1 in Vijaya Bank, and he was the branch head, and they signed the said document. Actually, there was no sanction order at all as the secured loan of Rs.30 lakhs sanctioned to the said company, but disbursed the amount of Rs.30 lakhs to M/s. Stratycon Technologies Pvt. Ltd. Under these circumstances, the above said contention of counsel for accused No.1 that accused No.1 granted the loan on the recommendation of the committee members consisting of PW.7, 20 and accused No.1 is not acceptable.
34.(i). PW.23 - Chandrashekar has deposed in the cross-examination in para 9 at page 11 that there 91 Spl.C.C.No.5/2010 was handwritten process in respect of Ex.P89 and 185. If there was no process note, loan would not have been accorded in normal course. In case process note was not there, the concurrent auditor would have raised the objections in his report. When he was examined by the CBI Officer he was not shown any report of the concurrent auditor in that respect. In case there was no process note in the concerned loan file, the concurrent auditor would have mentioned the same in his report as an irregularity. In case there was no process note in respect of any loan the Vetting Officer would also have raised objection in that respect.
Counsel for accused No.1 has contended that the prosecution should have examine the concurrent auditor and vetting officer, but not examined them to prove that process note was not approved before disbursing the alleged loan of Rs.30 lakhs. No doubt, prosecution has not examined the said officials, but only on that ground it cannot be said that the process note was prepared on 11.09.2007 or before disbursement of loan, because the discussion made above clearly shows that Ex.P89 process 92 Spl.C.C.No.5/2010 note was prepared subsequent to 11.09.2007. I have discussed the evidence of PW.23 regarding this aspect and also discussed in detail and stated that the said loan amount of Rs.30 lakhs was disbursed without get preparing the process note and without sanction order for granting the said loan.
34.(j). PW.9 - D.C. Krishnappa has deposed in evidence (para 15, page 12 and 13) that entire secured loan of Rs.30 lakhs is released to three (3) firms for purchase of computers and spare parts. The sanctioning authority should have insisted for minimum 25% margin amount namely Rs.7,50,000/- from the borrower, and the loan eligible was only Rs.22.50 lakhs. For Rs.30 lakhs 25% comes to Rs.7,50,000/-. In respect of the above said secured loan the Branch should have inspected the securities namely computers at the place of the business of the borrower but there are no records to show that such post sanction inspection has been conducted. In the appraisal note for secured loan of Rs.30 lakhs, there are no comments about the cost of the 93 Spl.C.C.No.5/2010 project, means of finance, technical feasibility, economic viability, risk analysis and also there is no project report. The Branch has not obtained the audited financial statement as on 31.03.2007 and projected financial statement as on 31.03.2008 and 31.03.2009. In the absence of the above financial statements the figures mentioned in the appraisal note cannot be verified and they are imaginary and not acceptable. The Branch head has not passed the sanction order and there is no sanction order number, date and details of interest etc. The above said evidence of PW.9 is not disputed in the cross-examination by the accused persons. There are no reasons to disbelieve the said evidence. It is clear from the evidence of this witness that it is not a correct and proper appraisal note regarding sanction of said loan of Rs.30 lakhs.
34.(k). He has deposed in para 12 at page 11 of his chief examination that after sanction of the secured loan of Rs.30 lakhs the Branch should have sent the copy of DOC-54 to the Regional Office, but the Branch 94 Spl.C.C.No.5/2010 Manager- accused No.1 has not submitted the DOC-54 to the Regional Office.
It appears from the evidence of this witness stated in para 23 at page 20 and 21 that Public Prosecutor has shown the carbon copies of the credit limit sanction proceedings cum reporting register for the months of September, October, 2007 and February 2008. He has deposed that the originals of the same should have been sent to the Regional Office. The statement for the month of September 2007 and October 2007 bears the signatures of the Assistant Branch Manager, but the statement of February 2008 is not signed by the Branch Manager or the Assistant Branch Manager. The statement copy of the September and October 2007 and February 2008 are not signed by the Branch head. The said statement copies are marked as Ex.P97, Ex.P98 and Ex.P99 respectively subject to admissibility and proof of the same. He has stated that in Ex.P97, the secured loan of Rs.30 lakhs sanctioned on 11.09.2007 is not appearing. Ex.P97 is the statement for the month of September 2007. The loan of Rs.30 lakhs was disbursed 95 Spl.C.C.No.5/2010 in the month of September 2007 i.e., on 11.09.2007 and in the month of October 2007 i.e., on 16.10.2007. Ex.P97 and 98 are the carbon copies of the statement. This witness has clearly states that originals of the same should have sent to the regional office. It appears that originals of the said documents might have sent to the regional office. I feel that under these circumstances no objection was raised by the counsel for accused regarding admissibility of these documents. These documents are admissible in evidence. Since the originals of the said documents sent to the regional office, the prosecution has produced these documents (Ex.P97, 98 and 99). In other words, prosecution has laid the foundation to produce these documents i.e., secondary evidence, and hence, these documents are admissible in evidence. In statement for the month of September 2007 and October 2007 (Ex.P97 and 98) not shown the secured loan of Rs.30 lakhs. I have already discussed in detail and stated that the said loan was not sanctioned, but released/disbursed the said loan of Rs.30 lakhs by accused No.1. If really said loan amount of 96 Spl.C.C.No.5/2010 Rs.30 lakhs was sanctioned on the basis of Ex.P89 - Appraisal Note on 11.09.2007 there was no any impediment or hesitation to the accused No.1 - Branch Head to show the said loan of Rs.30 lakhs either in the monthly statement of September 2007 or October 2007, but he has not shown the said loan amount in the said statements, because the said loan was not sanctioned on 11.09.2007.
It is clear from the above discussions that even though recommendation made for sanction of secured loan of Rs.30 lakhs to M/s. Stratycon Technologies Pvt. Ltd., in Ex.P89, the said loan was not at all sanctioned, but the said loan of Rs.30 lakhs was disbursed by accused No.1 on 11.09.2007 and 16.10.2007 as already stated. Ex.P89 Appraisal Note is not correct and proper and regarding this aspect I have already discussed in detail. Ex.P89 was prepared after long days from the dates of disbursement of loan of Rs.30 lakhs and got the signatures of PW.7 and PW.20 on the said document (Ex.P89).
97 Spl.C.C.No.5/2010
34.(l). PW.7 has not stated anything regarding this Ex.P89. PW.20 has stated that she has not seen the loan application but she has singed the Ex.PP.89 along with PW.7. Accused No.1 should have entrusted the loan application to the two officers (PW.7 and 20) working in the advance section of Vijaya Bank, Koramangala Branch, Bengaluru for approval, but accused No.1 himself had dealt with the said matter. As I have already stated accused No.1 got prepared Ex.P89
- Appraisal Note after long days from 11.09.207 and got the signatures of PW.20 and 7. However, there is no order for sanction, but the loan amount of Rs.30 lakhs was disbursed to M/s. Stratycon Technologies Pvt. Ltd. As on the date of disbursal of the loan amount to M/s. Stratycon Technologies Pvt. Ltd., accused No.1 had not created the equitable mortgage in respect of the properties which are taken as collateral security to the said loan and he had created equitable mortgage in favour of the bank on 12.12.2007 i.e., after disbursement of the loan. It is evident from Ex.P184 - Memorandum dated 12.12.2007 that the properties (site 98 Spl.C.C.No.5/2010 No.32 and 88 of Yadavanahalli Village) mentioned in Ex.P184 was mortgaged to the said bank on 12.12.2007. Accused No.1 being the Branch head of the bank should have not disbursed any loan amount to M/s. Stratycon Technologies Pvt. Ltd., without sanction order. But he has disbursed the loan amount without sanction order as on the date of disbursal of the said loan amount. The conduct of accused No.1 is not good and correct in disbursing the loan amount to said M/s. Stratycon Technologies Pvt. Ltd. It appears that he colluded with accused Nos.2 and 3, who are directors of M/s. Stratycon Technologies Pvt. Ltd., and disbursed the said loan of Rs.30 lakhs in order to facilitate/help the said company. These are all clearly shows that there is criminal conspiracy among accused Nos.1, 2 and 3 in the matter of sanction and disbursal of the said loan amount of Rs.30 lakhs to the said company. The act of accused Nos.1 to 3 clearly constitutes the criminal conspiracy in the matter of sanction and disbursing the said loan amount of Rs.30 lakhs to the said company. 99 Spl.C.C.No.5/2010
35. (a). The case of the prosecution is that the borrower - M/s. Stratycon Technologies Pvt. Ltd., had submitted quotations of M/s. Vignesh Techno Services, No.599, 8th Block, Koramangala, Bengaluru to the bank regarding the supply of computer hardware/software. The said bank had issued a demand draft dated 11.09.2007 for Rs.17,94,000/- in favour of M/s Vignesh Techno Services (hereinafter referred to as 'VTS'), and the same came to be deposited in the current account No.24600200000144 held in the name of VTS at Bank of Baroda, BTM Layout Branch, Bengaluru on 12.09.2007. The said VTS is a non-existing firm held in the name of accused No.4 - Vinay K.R., and the said VTS had not supplied any computer software/hardware against the said quotation/invoices to the M/s. Stratycon Technologies Pvt. Ltd. A cheque bearing No.235954 dated 12.09.2007 for Rs.17,94,000/- was issued in favour of M/s. Stratycon Technologies Pvt. Ltd., came to be deposited in the current account No.29600200000121 held at Bank of Baroda, BTM Layout Branch, Bengaluru. Thus, accused Nos.2 and 3 had fraudulently obtained 100 Spl.C.C.No.5/2010 Rs.17,94,000/- from Vijaya Bank, Koramangala Branch, Bengaluru.
35.(b.) Now it is necessary to see that whether the said VTS is in existence or not, and it is a fictitious firm or real firm.
Ex.P94 is the invoice dated 03.09.2007 issued by Vignesh Techno Services (VTS), No.599, 8th Block, Koramangala, Bengaluru (address mentioned in the bottom of the said invoice). It appears that said VTS has issued the quotation for supplying computers mentioned in description column of this invoice worth of Rs.17,94,000/- Ex.P95 is the receipt dated 15.09.2007 issued by said VTS. It is stated in Ex.P95 that a sum of Rs.17,94,000/- is received from Vijaya Bank, account M/s. Stratycon Technologies Pvt. Ltd., towards supply of items as per invoice No.VTS/INO/215/07-08. In Ex.P95 D.D. number mentioned as 603410, dated 11.09.2007. It appears from Ex.P199 copy of DD dated 11.09.2007 for Rs.17,94,000/- issued by Vijaya Bank in favour of VTS that the D.D. number is 92012220, and also mentioned the number as 063410 at the bottom of the 101 Spl.C.C.No.5/2010 said Ex.P199. D.D.No.063410 mentioned in Ex.P95 is not a D.D. number. However, it is clear from Ex.P95 that said VTS has received a sum of Rs.17,94,000/- from Vijaya Bank account M/s. Stratycon Technologies Pvt. Ltd., through DD towards supply of items as per invoice.
Ex.P125 is the account opening form dated 24.08.2007 given by Vinay K.R. - accused No.4, for opening a current account in the Bank of Baroda, BTM Layout, Bengaluru. In this document the address of VTS is mentioned as "#519, II Floor, 10th Cross, 12th Main, Padmanabha Nagar, Bengaluru-70" and account number mentioned as 29600200000144. Ex.P125(a) is the letter of Sole proprietorship dated 24.08.2007. It is stated that said Vinay K.R., (accused No.4) is the proprietor of the said VTS. Ex.P125(b) is the registration certificate (Form-C) issued by the Labour Department. In this document stated the address of the firm as "#519, II Floor, 10th Cross, 12th Main, Padmanabha Nagar, Bengaluru-70" and nature of the business is computer sales and services and rental and said VTS was registered on 21.08.2007.
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PW.16 - Prabhat Kumar Shukla, Branch Manager, Bank of Baroda, Gowribidanur, has deposed in the evidence that he was working as a Credit Officer in Bank of Baroda, BTM Layout Branch, Bengaluru from July 2008 to May 2011. He has deposed regarding account opened by said Vinay K.R., in the said bank on 24.08.2007 and also deposed about the said document. PW.30- Ranagaswamy K., Retired Senior Labour Inspector has deposed in the evidence about Ex.P232, which is the certified copy of the application given for registration (Form-A). In this document it is stated that Vinay K.R., (accused No.4) is the proprietor of said VTS, and given the same address which mentioned in Ex.P125(b) registration certificate. PW.30 has deposed that said Vinay K.R., is the proprietor of said VTS. The address of VTS mentioned in Ex.P94 and 95 is different from the address of VTS mentioned in Ex.P125 and Ex.P125(b). Both VTS are different.
It is clear from the above evidence and documents that VTS (Registered Firm) is located at Padmanabha Nagar, Bengaluru, and accused No.4 -Vinay K.R., is the 103 Spl.C.C.No.5/2010 proprietor of the said firm. Accused No.4 has not issued invoice relating to the said firm which situates at Padmanabha Nagar, Bengaluru. He has issued Ex.P94 invoice/quotation dated 03.09.2007, and Ex.P95 receipt dated 15.09.2007 which shows that VTS is located at Koramangala, Bengaluru (address mentioned in Ex.P94 and 95). Except this Ex.P94, and 95 no oral and documentary evidence produced by accused No.4 or accused Nos.1, 2 and 3 to show that said VTS is located at Koramangala, Bengaluru. If really said accused No.4 is proprietor of VTS situated at Koramangala, Bengaluru, certainly he would have get registered the same in the Labour Office, but not registered. Except these (Ex.P94 and 95) documents, absolutely no documents to show that said firm is in existence. Both documents are false documents. It is clear that said VTS is not in existence and it is a fictitious firm. Hence, the question of issuing quotation-invoice as per Ex.P94 for supply of computers etc., to M/s. Stratycon Technologies Pvt. Ltd., does not arise at all. It is clear that VTS mentioned in Ex.P94 and 104 Spl.C.C.No.5/2010 95 had not at all supplied any computers etc., to M/s. Stratycon Technologies Pvt. Ltd.
35.(c). Ex.P126 is the extract of the statement of account of VTS (Padmanabha Nagar, Bengaluru) issued by the Bank of Baroda, BTM Layout, Bengaluru. It appears from this Ex.P126 that said amount of Rs.17,94,000/- was credited to the account of VTS on 12.09.2007 through cheque No.63410. This number is referred in Ex.P199 copy of DD issued by Vijaya Bank to VTS. Ex.P129 is the credit challan of Bank of Baroda dated 11.09.2007 for Rs.17,94,000/-. There is an entry on the backside of Ex.P129 about cheque No.063410 dated 11.09.2007 of Vijaya Bank, Koramangala Branch, Bengaluru (PW.16 has deposed in detail in para 5 page 4 regarding the EX.P126 and 129). If really said VTS situated at Koramangala, Bengaluru, certainly said amount should have been credited to VTS situated at Koramangala, Bengaluru. But it is credited to VTS situated at Padmanabha Nagar, Bengaluru. This fact also clearly shows that there is no firm named as Vignesh Techno Services at Koramangala, Bengaluru. 105 Spl.C.C.No.5/2010
Ex.P140 is the cheque bearing No.235954 for Rs.17,94,000/- dated 12.09.2007 issued by VTS to M/s. Stratycon Technologies Pvt. Ltd. Ex.P174 is an extract of statement of account of M/s. Stratycon Technologies Pvt. Ltd., pertaining to account No.29600200000121. It appears that an amount of Rs.17,94,000/- was credited to the account of M/s. Stratycon Technologies Pvt. Ltd., on 12.09.2007 and the same is marked as Ex.P174(b). It appears that said amount was transferred from VTS. It is clear from all these documents that the Bank has issued DD for Rs.17,94,000/- in the name of VTS and the said amount credited to the account of VTS, Padmanabha Nagar on 12.09.2007, and on the same day the said amount was credited to the account of M/s. Stratycon Technologies Pvt. Ltd. Accused Nos.2 and 3, who are the directors of M/s. Stratycon Technologies Pvt. Ltd., are operating the account of the said company. If really VTS is situated at Koramangala, Bengaluru and supplied computers mentioned in Ex.P94 invoice-quotation, certainly alleged proprietor of the said firm Vinay K.R. (accused No.4) would have retained the said amount, 106 Spl.C.C.No.5/2010 and there was no question of transferring the said amount to the account of M/s. Stratycon Technologies Pvt. Ltd., in which accused Nos.2 and 3 are the directors. Accused No.3 - Ramaiah Setty is the father of accused No.4- Vinay K.R. It is clear that accused Nos.2 and 3 have fraudulently and dishonestly obtained the said amount of Rs.17,94,000/- from Vijaya Bank.
Vignesh Techno Services is not situated at Koramangala, Bengaluru and it is a fictitious firm. Ex.P94 invoice-quotation dated 03.09.2007 and Ex.P95 receipt dated 15.09.2007 are false and created documents, and said VTS has not at all supplied any computers to M/s. Stratycon Technologies Pvt. Ltd. It is clear that accused Nos.2, 3 and 4 colluded together and criminally conspired and created Ex.P94, and also created Ex.P95 as if accused No.4 - Vinay K.R., supplied computers to M/s. Stratycon Technologies Pvt. Ltd. Accused Nos.2, 3 and 4 have used the said Ex.P94 and 95 as genuine documents, knowing fully well that these documents are false documents (forged documents) and cheated the bank. It is relevant to state that the bank 107 Spl.C.C.No.5/2010 has disbursed the huge loan amount of Rs.30 lakhs on the basis of application given by accused Nos.2 and 3, who are the directors of M/s. Stratycon Technologies Pvt. Ltd. Under these circumstances before issuing a DD for Rs.17,94,000/- to the supplier of the computers, the bank manager/branch head (accused No.1) should have insisted the accused Nos.2 and 3 to produce necessary documents to show that VTS mentioned in Ex.P94 is authorized dealer or not. If really accused No.1 insisted for necessary documents to show that VTS mentioned in Ex.P94 is authorized dealer, and it is really in existence, certainly real fact would have come to the knowledge of accused No.1 before issuing of said DD. It appears that accused No.1 being the branch head of the bank has not insisted for the same for the best reasons known to him. It appears that the accused Nos.1, 2, 3 and 4 colluded together and created these documents (Ex.P94 and 95), and ultimately, accused Nos.2 and 3 have fraudulently obtained said amount of Rs.17,94,000/- from Vijaya Bank. It is clear that there is criminal conspiracy among accused Nos.1, 2, 3 and 4 regarding get releasing the 108 Spl.C.C.No.5/2010 said amount from the Bank, and they fraudulently and dishonestly created Ex.P94 and 95 with an intention to cheat the said bank and they induced accused No.1 to disburse the said amount to VTS mentioned in Ex.P94. Hence, it is clear that from the inception i.e., from the stage of giving quotation to the bank accused Nos.2, 3 and 4 criminally conspired together and fraudulently and dishonestly created Ex.P94 invoice-quotation and thereafter created Ex.P95 receipt with an intention to cheat the bank. It is clear that accused Nos.1, 2, 3 and 4 have committed the offences punishable under Section 120-B, 409, 420, 468, 471 of IPC in respect of this amount of Rs.17,94,000/-
36. (a). It is the case of the prosecution that M/s. SLV Solutions, situated at No.34, 1st Floor, 3rd Cross, 10th Main, Banashankari III Stage, Bengaluru had issued a quotation to M/s. Stratycon Technologies Pvt. Ltd, company and the said company submitted the said quotation to Vijaya Bank, and the said bank had issued a DD for Rs.2,43,364/- on 11.09.2007 in favour of said 109 Spl.C.C.No.5/2010 SLV and the same was deposited in current account No.CBCA-148 held at Corporation Bank, Padmanabha Nagar Branch, Bengaluru. The said M/s. SLV Solutions is a non-existing firm and the said firm had not supplied any computer hardware/software against the quotation/invoice submitted to the bank. A cheque bearing No.247576 dated 12.09.2007 for Rs.2,43,364/- was issued in favour of M/s. Stratycon Technologies Pvt. Ltd., and the same came to be deposited in the current account No.29600200000121 held at Bank of Baroda, BTM Layout Branch, Bengaluru. Thus, accused Nos.2 and 3 had fraudulently obtained Rs.2,43,364/- from Vijaya Bank, Koramangala Branch, Bengaluru.
Ex.P92 is the invoice dated 04.09.2007 issued by said M/s. S.L.V. Solutions, No.34, 1st Floor, 3rd Cross, 10th Main, Banashankari 3rd Stage, Bengaluru. It appears that the said Ex.P92 issued to M/s. Stratycon Technologies Pvt. Ltd., for supply of IBM System by the said SLV. Ex.P93 is the receipt dated 14.09.2007 issued by the said SLV. It appears that said firm has received a sum of Rs.2,43,984/- from Vijaya Bank account M/s. 110 Spl.C.C.No.5/2010 Stratycon Technologies Pvt. Ltd., towards supply of IBM System, and received through a DD on 11.09.2007 drawn on Vijaya Bank.
According to the prosecution this SLV is also not in existence, and said SLV had not supplied any computers to M/s. Stratycon Technologies Pvt. Ltd.
Ex.P102 is the account opening form submitted by K. Ramaiah Setty (accused No.3) to the Corporation Bank, Padmanabha Nagar, Bengaluru for opening of current account in the name of SLV Solutions. Said application was submitted on 01.09.2007 and the account number is CBCA-148. The business/employer's office address mentioned as "#519, II Floor, 10th Cross, 12th Main, Padmanabha Nagar, Bengaluru" and the same address is also mentioned as his residential address. Ex.P102(c) is the letter of proprietorship dated 01.09.2007, and it is stated that Ramaiah Setty is the sole proprietor of said SLV. Ex.P102(d) is the copy of the registration certificate of the firm (Form-C) issued by the Labour Inspector, Bengaluru. It is stated that said Ramaiah Setty is the employer and the name of said 111 Spl.C.C.No.5/2010 establishment is M/s. S.L.V. Solutions, and address of the said SLV mentioned as #519, II Floor, 10th Cross, 12th Main, Padmanabha Nagar, Bengaluru. This document is marked subject to objection.
PW.10 - G. Raju, Manager, Corporation Bank has deposed in the evidence that he worked as Branch Manager in Corporation Bank, Padmanabhanagar Branch, Bengaluru from 2007 to 2009. He has deposed regarding the said documents. He has deposed in the evidence that current account is opened in the name of M/s. S.L.V. Solutions and its proprietor is Ramaiah Setty (accused No.3). He has further deposed that along with the account opening form, said Ramaiah Setty had given Xerox copy of the registration certificate issued by the Department of Labour in respect of registration of the establishment i.e., M/s. S.L.V Solutions and the said document is admitted in the evidence subject to admissibility and proof of the same, and it is marked as Ex.P102(d). It is relevant to state that said Ramaiah Shetty should have give the original document to the bank or shown the same to the bank while opening the 112 Spl.C.C.No.5/2010 account, but he has given the Xerox copy of the registration certificate, and hence, PW.10 could not produce the original of said Ex.P102(d). He has laid the foundation for producing the said copy in the evidence and not produced original. Under these circumstances, said document is admissible in evidence as secondary evidence.
PW.41 - Jaboy K.R., (I.O.) has deposed in the cross-examination in para 15 at page 66-67 that "address of M/s. S.L.V. Solutions shown in the invoice- Ex.P92 and the receipt-Ex.P93 are different from the address of M/s. S.L.V. Solutions as per the registration details (Ex.P102(d)), and his investigation disclosed that there was no supply of IBM System to M/s. Stratycon Technologies Pvt. Ltd." The address mentioned in Ex.P92 and Ex.P93 are different from the address given in Ex.P102 (bank application) and Ex.P102(d) - registration certificate. Accused No.3 - Ramaiah Setty has not issued any quotation of SLV Solutions located at Padmanabha Nagar, Bengaluru, but issued the invoice of SLV situated at Banashankari, Bengaluru and also issued receipt for 113 Spl.C.C.No.5/2010 having received an amount of Rs.2,43,984/-. If really said SLV situated at Banashankari, Bengaluru, certainly he would have got registered the said firm in the Labour Department. But except this document no other documents produced to show that said SLV is in existence. It is a fictitious firm. When it is a fictitious firm, the question of supplying computers mentioned in Ex.P92 does not arise at all. Said SLV situated at Banashankari, Bengaluru has not at all supplied any computers to M/s. Stratycon Technologies Pvt. Ltd. It is a false document, which is created by accused No.3 - Sri. Ramaiah Setty, who is one of the directors of M/s. Stratycon Technologies Pvt. Ltd.
Ex.P93 receipt is also a false document created by Ramaiah Setty (accused No.3). In other words, Ex.P92 and 93 are false documents (forged documents). Accused Nos.2 and 3 who are the directors of the company used the said documents as genuine documents knowing fully well that these are false documents and cheated the bank.
114 Spl.C.C.No.5/2010
36.(b). Ex.P197 is the voucher of Rs.2,43,984/- dated 11.09.2007 of Vijaya Bank. It appears that DD purchased for Rs.2,43,984/- in favour of M/s. S.L.V. Solutions. Along with Ex.P197 copy of the DD No.92012221 is also produced. It appears that Vijaya Bank, Koramangala Branch has issued a DD for Rs.2,43,984/- in favour of M/s. S.L.V. Solutions. No.063411 is mentioned in bottom of this document. The same number is mentioned as DD number in Ex.P93- Invoice, but actually it is not a DD number. D.D. number is 92012221. Ex.P103 is the account statement extract of M/s. SLV Solutions, Padmanabha Nagar, Bengaluru, pertaining to account No.CBCA/01/000148 and this extract issued by Corporation Bank, Bengaluru. It appears that on 12.09.2007 said amount of Rs.2,43,984/- credited to the account of said SLV. Ex.P174 is the extract of statement of account relating to account No.29600200000121 of M/s. Stratycon Technologies Pvt. Ltd., in Bank of Baroda, Bengaluru. It appears that on the same day i.e., on 12.09.2007 an amount of Rs.2,43,984/- was credited to its account. It 115 Spl.C.C.No.5/2010 appears from Ex.P103 that the said amount of Rs.2,43,984/- debited on the same day(cheque No.242576), and accused No.3 got transferred the said amount from the account maintained in Corporation Bank to M/s. Stratycon Technologies Pvt. Ltd., maintained in Bank of Baroda. If really said SLV is located at Banashankari and it is in existence, and he (accused No.3-Ramaiah Setty) is the proprietor of said firm, and he had supplied the computers mentioned in Ex.P92 to M/s. Stratycon Technologies Pvt. Ltd., he would have retained the said amount in SLV account (Ex.P103), and there was no necessity to transfer the said amount to M/s. Stratycon Technologies Pvt. Ltd. It is clear that accused Nos.2 and 3, who are the directors of the said company fraudulently got the said amount of Rs.2,43,984/- from Vijaya Bank, Koramangala Branch.
Accused No.1 being the branch head had issued a DD for Rs.2,43,984/- in the name of M/s. S.L.V. Solutions as the said firm supplied computers mentioned in invoice to M/s. Stratycon Technologies Pvt. Ltd., company. Before disbursing the said amount, accused 116 Spl.C.C.No.5/2010 No.1 should have insisted the accused No.3 who is alleged to have proprietor of said SLV, situated at Banashankari, to produce the document to show that the said SLV is authorized dealer. But it appears that he has not at all tried to ascertain whether said SLV is an authorized dealer or not, and whether said firm is really in existence or not.
36.(c). Ex.P92 - invoice is a false document created by accused No.3, who is one of the directors of M/s. Stratycon Technologies Pvt. Ltd. He knows very well that said SLV is not situated at Banashanakri, Bengaluru, and knowing fully well this fact, he has created a false document and produced the same to the bank. In order to cheat the said bank, he produced the same to the bank, and induced the accused No.1 to disburse the said amount of Rs.2,34,948/- to M/s. SLV Solutions, Banashankari, Bengaluru, which is not in existence. Thereafter, created Ex.P93 receipt which is a false document. In Ex.P197 voucher and copy of DD mentioned as SLV Solutions, but not mentioned the address of the said SLV. Accused No.3 has produced the 117 Spl.C.C.No.5/2010 DD in Corporation Bank, Padmanabha Nagar Branch, and got credited the said amount to the account which is there in the name of SLV Solutions, Padmanabha Nagar, Bengaluru, and thereafter, got transferred the said amount to M/s. Stratycon Technologies Pvt. Ltd. Accused No.2 being the Managing Director of said M/s. Stratycon Technologies Pvt. Ltd., knows very well that said SLV is not in existence, and accused Nos.2 and 3 have produced the false documents to the bank and got disbursed the said amount. It is clear that accused Nos.1, 2 and 3 colluded together and criminally conspired with each other and they fraudulently and dishonestly cheated the bank by producing false documents i.e., Ex.P92 and 93 and obtained the above said amount. It is clear that they have committed the offences punishable under sections 120-B, 409, 420, 468, and 471 of IPC in respect of the amount of Rs.2,43,984/-
37. (a). It is the case of the prosecution that a cheque bearing No.244905 dated 16.08.2007 for Rs.9,62,016/- was issued by Vijaya Bank, Koramangala 118 Spl.C.C.No.5/2010 Branch, Bengaluru, in favour of M/s. Impact Securitas, and the same was deposited in current account No.30014813510 held in the name of M/s. Impact Securitas, No.606, 6th Floor, A-Wing, Mittal Towers, M.G. Road, Bengaluru at State Bank of India, Church Street Branch, Bengaluru. Two cheques bearing No.981842 dated 17.10.2007 for Rs.7 lakhs, and cheque bearing No.981843 dated 17.10.2007 for Rs.2,60,000/- were issued in favour of M/s. Stratycon Technologies Pvt. Ltd., and the same was deposited in current account No.139400301000330 held at Vijaya Bank, Koramangala Branch, Bengaluru. There was no underlying business transactions between the two companies, and accused No.2 had got the entire amount disbursed in favour of M/s. Impact Securitas transferred in favour of his company with the help of G.R. Nagabhushana, Proprietor, M/s. Impact Securitas, No.606, 6th Floor, A- Wing, Mittal Towers, M.G. Road, Bengaluru.
37.(b). PW.3 - B. Gurudatta Shenoy has deposed in his evidence in para 33 at page 13 that Vijaya Bank has issued a DD for Rs.9,62,016/- in favour of M/s. 119 Spl.C.C.No.5/2010 Impact Securitas. However, there is no quotation from the said M/s. Impact Securitas. PW.9 - D.C. Krishnappa has deposed in the evidence that on 16.10.2007, Rs.9,62,016/- has been released by way of DD. Ex.P198- DD is dated 16.10.2007 for Rs.9,62,016/- issued by Vijaya Bank in favour of M/s. Impact Securitas. The copy of receipt dated 16.10.2007 relating to this amount of Rs.9,62,016 is also produced. It is clear that said Viajaya Bank had issued DD for Rs.9,62,016/- on 16.10.2007 and not on 16.08.2007 as stated in the charge-sheet.
37.(c). PW.9 has further deposed in the evidence at para 12 (page 11) that an amount of Rs.9,62,016/- also released to M/s. Impact Securitas and there is no invoice for the same, but there is a receipt dated 16.10.2007 in favour of the Bank and it is marked as Ex.P96. It appears from Ex.P96 that a sum of Rs.9,62,016/- received by M/s. Impact Securitas from Vijaya Bank account M/s. Stratycon Technologies Pvt. Ltd., on 16.10.2007 through DD No.827593 drawn on Vijaya Bank towards IBM servers. Said receipt issued by 120 Spl.C.C.No.5/2010 Sri. Suresh on behalf of M/s Impact Securitas. Ex.P119 is the pay in slip dated 17.10.2007 relating to amount of Rs.9,62,016/-. In this document mentioned the cheque number as 827513 and the same number is referred in Ex.P96 - receipt.
PW.12 - Nagabhushan has deposed in the evidence that he is doing security related business in the name of Impact Solutions and Impact Securitas. He is the Proprietor of both Impact Solutions and Impact Securitas. He has stated in the evidence that Ex.P96 is not the receipt issued by him and it is also not signed by him or by any of his people and it is not the receipt issued by his security services. He had no person by name Suresh in his security services and he has not dealt with IBM servers (equipments) at any time. He has deposed in the cross-examination in page 10 that some officials were working under him, but he was not empowered anybody to issue receipt on behalf of Impact Securitas. Name and address shown in Ex.P96 is the name and address of his proprietary concern i.e., Impact Securitas. He has stated that the amount mentioned in 121 Spl.C.C.No.5/2010 Ex.P96 and 119 are tallied. He has deposed in the evidence in para 10 (page 6) that he has returned the said amount of Rs.9,62,016/- by way of two cheques on 17.10.2007 for Rs.7 lakhs and Rs.2,60,000/- in favour M/s Stratycon Technologies Pvt. Ltd. Ex.P120 and Ex.P121 are the said cheques dated 17.10.2007. Ex.P120 is the cheque bearing No.981842 for Rs.7,00,000/- and Ex.P121 is the cheque bearing No.981843 for Rs.2,60,000/- and both are dated 17.10.2007. Said two cheques have been encashed and amount has been credited to the account of M/s Stratycon Technologies Pvt. Ltd. He has deposed that M/s. Impact Securitas has not supplied any hardware equipments pertaining to computers or security equipments to M/s Stratycon Technologies Pvt. Ltd. at any time. He has stated that accused No.2 told that he needs his (PW.12) help to show his business transaction, and hence he received the cheques and paid back the amount. In his cross-examination nothing is elicited to disbelieve his evidence. In the cross-examination he has deposed in para 6 at page 12 that he received the said 122 Spl.C.C.No.5/2010 amount of Rs.9,62,016/- for doing personal favour to accused No.2 at his request. Ex.P116 is the statement of account extract of M/s. Impact Securitas. It appears that said firm has an account in State Bank of India, Church Street, Bengaluru. It appears that said amount of Rs.9,62,016/- was credited to his account on 18.10.2007 and said relevant entry is marked as Ex.P116(a). It appears that the amount of Rs.2,60,000/- debited to his account on 18.10.2007 (Cheque No.981843) and Rs.7 lakhs is also debited to his account on 19.10.2007 (Cheque No.981842).
37.(d). Ex.P3 is the statement of account extract relating to account N.139400301000330 belongs to M/s. Stratycon Technologies Pvt. Ltd. The said company is having an account in Vijaya Bank, Koramangala Branch, Bengaluru. It appears from Ex.P3 that on 19.10.2007 an amount of Rs.7 lakhs (cheque No.981842) credited to the account of the said company. It appears from Ex.P174 statement of account extract of M/s. Stratycon Technologies Pvt. Ltd., maintained in Bank of Baroda, Bangalore that on 19.10.2007 an amount of 123 Spl.C.C.No.5/2010 Rs.2,60,000/- credited to the account of the said company (cheque No.981843). It is clear that totally an amount of Rs.9,60,000/- credited to the account of M/s. Stratycon Technologies Pvt. Ltd. But through the DD, total amount of Rs.9,62,016/- given to the said M/s. Impact Securitas. PW.12 has admitted in the cross- examination in para 9 at page 14 that Ex.P120 and Ex.P121 does not reflect the exact amount received from M/s Stratycon Technologies Pvt. Ltd., but the difference is the Bank charges. He has further stated in para 10 that Rs.2,016/- is retained as service charges with the consent of the client. He has stated that there is no consent in writing. Ex.P120 is the cheque of Rs.7 lakhs and Ex.P121 is the cheque of Rs.2,60,000/-, total Rs.9,60,000/- I have already stated that the difference amount of Rs.2,016/- is the bank charges.
37.(e). Ex.P96 is the receipt issued by M/s. Impact Securitas, which is a false document. The said M/s. Impact Securitas has not issued any invoice to M/s. Stratycon Technologies Pvt. Ltd., and the said company has not produced any invoice to the Vijaya Bank, but 124 Spl.C.C.No.5/2010 Impact Securitas has issued the said receipt as it has received an amount of Rs.9,62,016/- from Vijaya Bank, account M/s. Stratycon Technologies Pvt. Ltd., towards supplying of IBM Servers. It is a huge amount. Even though there is no invoice issued by said M/s. Impact Securitas, said bank has issued DD for Rs.9,62,016/- to M/s. Impact Securitas. There is no basis to the said bank to disburse the said amount in favour of M/s. Impact Securitas. It shows the dishonest act of the accused No.1 - Radhakrishna Setty, Branch Head of the said bank. It is clear from the evidence and documents that Ex.P96 is a false document, and PW.12 - Nagabhushan proprietor of said M/s. Impact Securitas has not at all supplied any hardware equipments pertaining to computers or security equipments to M/s. Stratycon Technologies Pvt. Ltd., at any point of time. His evidence clearly shows that accused No.2 who is one of the directors of said M/s. Stratycon Technologies Pvt. Ltd., had told him (PW.12) as he needs his (PW.12) help to show his business transaction to the bank, and hence, he (PW.12) received the said cheque of Rs.9,62,016/- and 125 Spl.C.C.No.5/2010 paid back the said amount to accused No.2. The act of accused No.1 in issuing DD for Rs.9,62,016/- in favour of M/s. Impact Securitas even though there is no invoice from the said firm shows that he colluded with accused No.2 ( and accused No.3) directors of M/s. Stratycon Technologies Pvt. Ltd. Company. Ex.P96- receipt issued by Impact Securitas and the said amount received from bank through DD, and returned by PW.12 to accused No.2 shows that there is a criminal conspiracy among accused Nos.1 and 2, and they fraudulently and dishonestly created Ex.P96, and accused No.2 has cheated the bank fraudulently and dishonestly and obtained the said amount of Rs.9,62,016/- from Vijaya Bank. It is clear that accused Nos.1 and 2 have committed the offences punishable under Sections 120- B, 409, 420 and 468 of IPC in respect of the said amount of Rs.9,62,016/-.
38. I have already discussed the evidence and documents elaborately in respect of the secured loan of Rs.30 lakhs. The act of accused Nos.1, 2, 3 and 4 in creation of documents clearly shows that all these 126 Spl.C.C.No.5/2010 accused persons have colluded and they have criminally conspired together with an intention to cheat Vijaya Bank and they have fraudulently and dishonestly got disbursed the said amount of Rs.30 lakhs from the said bank, and accused Nos.2, 3 and 4 have got the said amount. Accused Nos.1, 2, 3 and 4 have committed the offences punishable under Sections 120-B, 409, 420, 468, and 471 of IPC relating to this loan amount of Rs.30 lakhs. Cash Credit (Misc.) limit loan of Rs.60 lakhs :-
39. (a). The case of the prosecution is that accused No.1 -Radhakrishna Shetty had sanctioned cash credit (miscellaneous) limit (hereinafter referred to as 'CCM') of Rs.60 lakhs on 30.10.2007 against the existing collateral securities. He had sanctioned additional CCM limit of Rs.60 lakhs on 11.10.2007 and further additional CCM limit of Rs.50 lakhs on 13.03.2008 without obtaining any application from the borrower and additional securities against the same. He had allowed the borrowings to exceed the total sanction limit of Rs.150 lakhs without sanctioning of additional limits. He had not entrusted the loan application of M/s. Stratycon 127 Spl.C.C.No.5/2010 Technologies Pvt. Ltd., to the two officers working in the Advances Section of said Vijaya Bank for appraisal, and himself had dealt with the matter, but he had prepared an appraisal note subsequently, and had obtained the signatures of the said two officers Vijaya Bank. This CCM limit of Rs.60 lakhs was sanctioned against the two properties which were taken as collateral security for the secured term loan of Rs.30 lakhs. Said properties were not valued at the time of sanctioning of secured loan of Rs.30 lakhs. The said properties came to be valued by K. Udayakumar Shetty, approved valuer, and he had submitted a report valuing the properties at Rs.35.36 lakhs. The said properties were highly inadequate for covering the total exposure of Rs.90 lakhs. The cash credit was sanctioned for meeting the working capital requirement of M/s. Stratycon Technologies Pvt. Ltd., and the entire amount was utilized for meeting outstanding liabilities with other individuals/institutions/ banks and partly received by the directors (accused Nos.2 and 3) themselves. The loan amount was fraudulently taken away through the accounts held in the 128 Spl.C.C.No.5/2010 name of M/s. SLV Solutions, M/s. Sri. Durga Enterprises, M/s. Vignesh Techno Services and M/s. Sughosh Advertising etc. A cheque bearing No.925244 dated 26.03.2008 for Rs.60,07,020/- was issued in favour of M/s. Sughosh Advertising, and the same came to be deposited in account No.CBCA-87 held at Corporation Bank, BTM Layout Branch, Bengaluru. Said M/s. Sughosh Advertising is a non existing firm and the same was being operated by accused No.5-Smt. Greeshma, Assistant (HR) of M/s. Stratycon Technologies Pvt. Ltd., Bengaluru. The entire loan amount was used for personal benefits, purchase of properties, and for meeting the outstanding liabilities of the two directors/company in various banks/institutions /individuals. In other words, the loan amount was not used by the company directors for the purpose for which it was sanctioned and it was used for some other purpose.
39.(b). Ex.P185 is the appraisal note dated 29.10.2007. It is stated in this note that the branch has sanctioned a need based secured loan of Rs.30 lakhs during September 2007 and the account is regular. Now 129 Spl.C.C.No.5/2010 the company has applied for working capital limit of Rs.60 lakhs in order to overcome the problem of working capital crunch and to streamline the business. It is relevant to state that it is not stated in this appraisal note that when the said company has applied for this loan of working capital. In the first page of this note it is stated that date of receipt of proposal is 25.10.2007, but there is no application or materials to show that the said company has applied or proposed for cash credit (misc.) limit of Rs.60 lakhs.
It appears that site No.32 situated at Sy.No.38/1, Yadavanahalli Village, Neralur Panchayat, Attibele Hobli, Anekal Taluk, Bengaluru District known as 'Hanuman Township' and Site No.88, situated at Sree Hanuman Township, Khata No./House list No.821/88, situated at Neraluru Panchayat, Attibele Hobli, Anekal Taluk, Bengaluru District were taken as collateral security for the said loan. Site No.32 is valued at Rs.15.19 lakhs and it belongs to one Sri. K. Shashi Kiran and site No.88 is valued at Rs.20,17 lakhs and the said property belongs to one Sri. Veeresham. Both the properties were valued 130 Spl.C.C.No.5/2010 by one Sri. K. Uday Kumar Shetty as per the valuation report dated 16.11.2007. It is relevant to state that these properties were already mortgaged to Vijaya Bank in respect of secured loan of Rs.30 lakhs which disbursed to M/s. Stratycon Technologies Pvt. Ltd. It is stated that these properties are taken as continuing securities to this cash credit (misc.) loan of Rs.60 lakhs.
39.(c). It is further stated in page 11 of this note that the company has applied for working capital limit of Rs.60 lakhs against the security of stock of computer hardwares with 25% margin and against the continuing security of land and building of two different units for a total value of Rs.35.36 lakhs as per the valuation report of K. Uday Kumar Shetty. Considering all the above facts into account, a need based working capital limit of Rs.60 lakhs may be sanctioned. It is also stated that placed it before BLCC for clearance. It is signed by Jagadeesh Shetty, Manager (Loans) (PW.7), Mrs. Jayashree, Manager (PW.20) and Chief Manager (accused No.1- Radhakrishna Shetty).
131 Spl.C.C.No.5/2010
It is relevant to state that there is no endorsement in this note or order to show that said loan was sanctioned by Chief Manager, or BLCC or any other higher officers of accused No.1. In other words, there is no sanction order at all to grant the said cash credit (misc.) limit of Rs.60 lakhs to the above said company. However, it is stated in the sanction communication letter (Ex.P8) that Rs.60 lakhs is sanctioned.
In this document it is not stated that when the said application was given by M/s. Stratycon Technologies Pvt. Ltd., and when the said loan was sanctioned. Apart that amount of Rs.60 lakhs is altered both in letters and figures. I will discuss regarding this aspect later.
39.(d). The above said two properties were offered as collateral security for the secured loan of Rs.30 lakhs disbursed by Vijaya Bank to M/s. Stratycon Technologies Pvt. Ltd. I have already discussed regarding valuation of these properties while discussing Ex.P89 appraisal note in respect of said secured loan of Rs.30 lakhs. Ex.P72 is the valuation report relating to site No.32 and the said property was valued on 132 Spl.C.C.No.5/2010 26.10.2007 by K. Uday Kumar Shetty. Ex.P73 is the inspection report of the said property. Ex.P74 is the valuation report dated 16.11.2007 in respect of Site No.88. Ex.P75 is the inspection report of the said property. PW.27 -K. Uday Kumar Shetty has adduced evidence regarding this aspect.
The valuations of both properties were taken into consideration for sanction and disburse the secured loan of Rs.30 lakhs. That means to say that said property No.88 was valued on 16.11.2007. I have discussed in detail and stated that Ex.P89 came into existence after long days of the secured loan of Rs.30 lakhs disbursed on 11.09.2007 and 16.10.2007. Likewise, regarding this CCM loan of Rs.60 lakhs this appraisal note (Ex.P185) was prepared after some days of disbursing the said loan amount of Rs.60 lakhs. In other words after disbursing CCM limit of Rs.60 lakhs to the M/s. Stratycon Technologies Pvt. Ltd., the bank had got valued the said properties and obtained the valuation report. It is relevant to state that the CCM limit of Rs.60 lakhs disbursed to M/s. Stratycon Technologies Pvt. Ltd., 133 Spl.C.C.No.5/2010 without sanction. It is not proper to disburse any loan amount without sanction order even though the branch head or any other officer of the bank is having absolute power and/or discretionary power, because the sanction order is basis for granting loan. But the CCM limit of Rs.60 lakhs has been granted and disbursed without the sanction order. It appears that there is clear collusion by accused No.1 with accused Nos.2 and 3, who are the directions of M/s. Stratycon Technologies Pvt. Ltd. Otherwise, there was no any necessity to the branch head - accused No.1 to disburse the above said CCM limit of Rs.60 lakhs without getting valuation reports in respect of the properties offered as collateral security and without the sanction order. These are all clearly shows that there is criminal conspiracy between accused Nos.1, 2 and 3 and there is also fraudulent and dishonest intention to cheat the bank.
39.(e). Counsel for accused No.1 has contended that accused No.1 had sanctioned the above said CCM limit of Rs.60 lakhs to M/s. Stratycon Technologies Pvt. Ltd., on the basis of the recommendation made by 134 Spl.C.C.No.5/2010 Jagadheesh Shetty-PW.7 and Smt. Jayashree-PW.20, who signed the Ex.P185. Hence, there is no fault committed by accused No.1 in sanctioning and disbursing the said loan, and there is no dishonest and fraudulent intention in respect of this loan and there is no intention to accused persons to cheat the bank.
PW.20 - Smt. Jayashree has deposed in the evidence that there is a recommendation in Ex.P185 - appraisal note that M/s. Stratycon Technologies Pvt. Ltd., can be granted CCM limit loan up to Rs.60 lakhs. The Chief Manager (accused No.1) has sanctioned the said loan to the said company. She had not seen the loan proposal and the documents annexed to the same given by M/s Stratycon Technologies Pvt. Ltd., in respect of the above said loan and accused No.1 had received them and he had seen them. She has signed the Ex.P185 and PW.7 Jagadheesh Shetty has also signed the same. Chandrashekar, Senior Branch Manager (PW.23) had prepared Ex.P.185 in the year 2008 after he came as Senior Branch Manager of Vijaya Bank, Koramangala Branch, and earlier to that both the above said secured 135 Spl.C.C.No.5/2010 loan and CCM Limit loan had been sanctioned to M/s Stratycon Technologies Pvt. Ltd. and before sanction of the loans, for lack of staff the appraisal notes had not been prepared. The evidence of this witness clearly shows that she has singed the Ex.P185 without knowing about the loan application. She does not know that when the said M/s. Stratycon Technologies Pvt. Ltd., was applied for loan and for what purpose and for what amount. She does not know anything about this loan except she signed the Ex.P185.
PW.7 - Jagadheesh Shetty has deposed in the evidence that he worked in Vijaya Bank from 26.06.2008 to 31.03.2010. He had worked as Loan Officer in Vijaya Bank, Koramangala Branch, Bengaluru in the Loan Section. He has stated that P. Chandrashekar-PW.23 came to Koramangala Branch as Senior Manager on 23.06.2008 and he has processed the loan application, but he has mentioned the date of processing as 29.10.2007. He (PW.7) signed the process note after release of the loan, but he has not put the date below his signature. After disbursal of the loan the appraisal note 136 Spl.C.C.No.5/2010 has been prepared by P. Chandrashekar. Out of the O.D. limit of Rs.30 lakhs, Rs.20 lakhs was released as per Ex.P.4(b) and the said amount has been credited to the current account of M/s Stratycon Technologies Pvt. Ltd. PW.7 and 20 have deposed that process note was prepared by P. Chandrashekar - PW.23, after long days of disbursing the loan of Rs.60 lakhs by accused No.1.
PW.23 -P. Chandrashekar has deposed in the evidence that from 15.05.2008 to 28.082008 he has worked as Senior Branch Manager in Vijaya Bank, Koramangala Branch, Bengaluru. He has deposed that Ex.P.185 is process note in respect of working capital of Rs.60 lakhs in favour of M/s Stratycon Technologies Pvt. Ltd. Accused No.1 gave the manuscript of the process note having the date 29.10.2007 and he (PW.23) typed the same in the office computer system by putting the above said date and got the print out and gave the same along with the manuscript to the accused No.1. Even prior to his typing Ex.P.185, the working capital loan stated above had already been sanctioned and disbursed also. He typed Ex.P.185 as per the instructions of 137 Spl.C.C.No.5/2010 accused No.1. It is clear that Ex.P185 prepared by PW.23 as per the instruction and manuscript given by accused No.1 after he (PW.23) came to the said branch on 15.05.2008. It clearly shows that Ex.P185 prepared on 15.05.2008 or subsequent to that date. Ex.P185 bears the date 29.10.2007. Actually it was not prepared on that day, but it was prepared subsequent to 15.05.2008. That means to say it was prepared after disbursal of CCM limit loan of Rs.60 lakhs on 30.10.2007.
Considering all these circumstances, it cannot be stated that accused No.1 has sanctioned the said loan on the basis of recommendation made by the committee members (BLCC) - PW.7 and 20. It appears from all these facts and circumstances that accused No.1 had himself dealt with this loan transaction of Rs.60 lakhs instead of entrusting this matter to two officers (PW.7 and 20) working in advance section at Vijaya Bank for appraisal. Accused No.1 himself had dealt with this matter, and got prepared this Ex.P185, and thereafter obtained the signatures of said two officers i.e., PW.7 and 20. Under these circumstances, the above said 138 Spl.C.C.No.5/2010 contention of counsel for accused No.1 that on the basis of the recommendation of PW.7 and 20, accused No.1 had sanctioned the loan and disbursed the same and there is no any fraudulent and dishonest intention by accused No.1 in dealing with this loan matter is not acceptable.
39.(f). PW.23 - Chandrashekar has deposed in the cross-examination in para 9 at page 11 that the loan would not have been granted in normal course if there was no process note. In case process note was not there, the concurrent auditor would have raised the objections in his report. In case there was no process note in the concerned loan file, the concurrent auditor would have mentioned the same in his report as an irregularity. In case there was no process note in respect of any loan, the vetting officer would also have raised objections in that respect. On the basis of this evidence, the counsel for accused No.1 has contended that the prosecution has not examined the concurrent auditor, and vetting officer. It is fatal to the case of the prosecution. It is relevant to state that the concurrent 139 Spl.C.C.No.5/2010 auditor, and vetting officer are no way concerned in respect of the loan application submitted by the customers to the bank and dealing with the loan transactions. I have already discussed in detail and stated that there was no loan application by M/s. Stratycon Technologies Pvt. Ltd., seeking CCM limit loan of Rs.60 lakhs from the bank. But the bank had disbursed the loan of Rs.60 lakhs without any sanction and the said appraisal note prepared by PW.23 after long days of disbursement of the loan to M/s. Stratycon Technologies Pvt. Ltd., by the bank. The bank had disbursed the said loan to M/s. Stratycon Technologies Pvt. Ltd., without preparing process note and disbursed the said loan on 30.10.2007. The evidence of PW.23 clearly shows that the loan would not have been granted in normal course if there was no process note, but in this case even though there was no process note on 29.10.2007 the loan was granted and disbursed to the above said company. These are all clearly shows that accused Nos.1, 2 and 3 have criminally conspired together in disbursing the loan to M/s. Stratycon 140 Spl.C.C.No.5/2010 Technologies Pvt. Ltd. They have fraudulently and dishonestly acted in respect of this loan transaction with an intention to cheat the bank.
39.(g). PW.1 - K. Shantharama Kamath has deposed in the evidence that from 15.10.2007 to 31.07.2011 he worked as General Manager in Vijaya Bank, Head office, Bengaluru. He retired on 31.07.2011. He was in concurrent charge as Chief Vigilance Officer, Vijaya Bank from 01.11.2008 to 12.12.2008. On 30.10.2007 a cheque for Rs.20 lakhs was presented in clearing drawn by the borrower company, but there was no balance to clear that cheque and by that time the account was overdrawn by Rs.10.02 lakhs. If the OD is drawn, that amount should be paid within 15 days. To enable cheque to be honoured the then Branch head accused No.1 has sanctioned a cash credit miscellaneous account with the limit of Rs.20 lakhs. The said cash credit miscellaneous account will be given generally against the security of stock in trade, book-debts and primarily on immovable properties. The said loan amount of Rs.20 lakhs has been transferred to the 141 Spl.C.C.No.5/2010 current account of the borrower, and the above said cheque has been honoured but the over drawing in the current account continued. Subsequently one more cheque for Rs.40 lakhs drawn in favour of Durga Enterprises by the borrower but the current account of the borrower had no balance to honour the cheque. Then the branch head-accused No.1 enhanced the cash credit miscellaneous account limit to Rs.60 lakhs to clear the above said cheque and that amount has been transferred to the current account of the borrower and the above said cheque for Rs.40 lakhs has been cleared. By doing so accused No.1 has altered the loan documents from 20 lakhs to 60 lakhs without the authentication of the borrower company. Thereafter the limits were enhanced to Rs.1 crore and then for Rs.1.5 crores subsequently documents were obtained for Rs.1.5 crores. However the branch head has continued to allow excess drawing in the cash credit miscellaneous account limit upto Rs.3.35 crores. He has deposed in the cross- examination that he has given evidence in the chief- examination on the basis of the report given to him by 142 Spl.C.C.No.5/2010 Gurudatta Shenoy. Ex.P1 is the investigation report dated 14.11.2008 given by PW.3- Gurudatta Shenoy.
PW.3 - Gurudatta Shenoy has deposed in the evidence that he was working as Chief Manager, Central Inspection Department, Head office, Bengaluru from January 2008 to June 2011. The General Manager, Central Inspection Department, Vijaya Bank had directed him to hold in-depth investigation into the alleged fraud committed by the borrower - M/s Stratycon Technologies Pvt. Ltd., and the branch head (Radhakrishna Shetty - accused No.1) in Koramangala Branch, Bengaluru. Indepth investigation was ordered to fix staff accountability if any. In the month of November 2008 he conducted the investigation and submitted the report to General Manager, Central Inspection Department, Vijaya Bank as per Ex.P1. He has further deposed that the cash credit account loan limit was Rs.20 lakhs and subsequently raised to Rs.60 lakhs by accused No.1 and subsequently raised to Rs.1,50,00,000/- by accused No.1. He has deposed in the evidence in para 6 page 3 that on 30.10.2007 a sum of Rs.20 lakhs has been 143 Spl.C.C.No.5/2010 credited to the current account which was overdrawn to the extent of Rs.10 lakhs, but because of the above said credit the account was brought under credit balance but the said Rs.20 lakhs is credited by giving one loan under cash credit miscellaneous (CCM) by the branch head. The relevant entry in Ex.P.3 is at Ex.P.3(d). The sanction of CCM has not been reported to the control office.
Ex.P5 to 10 are the documents relating to CCM limit loan of Rs.20 lakhs (altered as Rs.60 lakhs). PW.3 has deposed regarding these documents in the evidence in para 13 at page 5 and 6. Ex.P5 is the pronote dated 30.10.2007 executed by M/s. Stratycon Technologies Pvt. Ltd., in favour of Vijaya Bank regarding CCM limit loan. It is relevant to state that the amount of Rs.20 lakhs altered as Rs.60 lakhs both in figures and words. PW.1 has deposed that the amount of Rs.20 lakhs mentioned in Ex.P5 in words and figures has been overwritten by erasing etc, as Rs.60 lakhs both in words and figures. He deposed that as per his investigation accused No.1 has made the said over writing in Ex.P5 to facilitate finance to the said company. Ex.P6 is the letter of repayment 144 Spl.C.C.No.5/2010 dated 30.10.2007. Ex.P7 is overdraft agreement dated 30.10.2007. Ex.P8 is sanction communication letter. Date is not mentioned in Ex.P8. Ex.P9 is the letter of guarantee dated 30.10.2007 executed by accused Nos.2 and 3 - directors of the company. Ex.P10 is the letter of guarantee dated 30.10.2007 executed by guarantor - K. Shashi Kiran. Ex.P6, 7, and 9 executed by accused Nos.2 and 3 in favour of said bank.
In all these Ex.P5, 6, 7, 8, 9 and 10 Rs.20 lakhs altered as Rs.60 lakhs and overwritten both in figures and words. According to PW.3 said act was done by accused No.1 in order to facilitate the finance to M/s. Stratycon Technologies Pvt. Ltd., company. He has clearly stated in his evidence that in all these documents Rs.20 lakhs was written when the documents were executed, but subsequently, it has been changed to Rs.60 lakhs. There is no signature of the borrower or the guarantor to the above said alterations made in the above said documents. The additional security for enhancing the limits from Rs.20 to Rs.60 lakhs is not taken. The charge is not created before the Registrar of 145 Spl.C.C.No.5/2010 Companies either for Rs.20 lakhs or for Rs.60 lakhs. The sanction of above said Rs.60 lakhs was to clear the current account over drawings.
PW.31 - B. Rajagopal Rai, the then Chief Manager of Vijaya Bank, Koramangala Branch has deposed in para 4 (page 3) that he checked CCM loan documents. The limit was originally given for Rs.20 lakhs, and it was altered into Rs.60 lakhs, and in the system it was enhanced to Rs.1 crore, and once again enhanced to Rs.1.50 crore. He enquired about the same in the bank and came to know that it was all done on the instructions of accused No.1. Some other witnesses have also deposed regarding the alteration made in Ex.P5 to 10.
PW.3 - Gurudatta Shenoy has deposed in the evidence in para 47 at page 19 that new documents have been obtained in respect of CCM account of M/s Stratycon Technologies Pvt. Ltd., for over written documents. Ex.P.40 is the pronote dated 30.10.2007 it is replacement of Ex.P5. Ex.P41 letter of repayment is obtained in replacement of Ex.P.6, and in respect of replacement of Ex.P.7, Ex.P.42 has been obtained. All 146 Spl.C.C.No.5/2010 these documents executed by accused Nos.2 and 3 in favour of Vijaya Bank. He deposed that in Ex.P40, 41, and 42, the date mentioned as 30.10.2007 which is the date mentioned in Ex.P5, 6 and 7, but they (Ex.P40, 41, and 42) have been obtained subsequent to 30.10.2007.
While recording statement of accused No.1 under Section 313 of Cr.P.C., the Court has put some questions relating to Ex.P5 to 10. He has answered that separate documents have been taken. Q.No.73 put to him regarding replacement of Ex.P5, 6 and 7 by Ex.P40 to 42. He has answered as 'yes, but any irregularities in the documents noticed or fund can be rectified by obtaining fresh documents."
It is relevant to state that the important point is that who committed alteration and overwritten made in Ex.P5 to 10 and for what purpose made alteration in the said documents. Mere taking of new documents i.e., Ex.P40 to 42 does not give answer regarding alteration/ overwritten made in Ex.P5 to 10 in place of the amount of Rs.20 lakhs as Rs.60 lakhs both in figures and words. As I have already stated this amount of Rs.60 lakhs was 147 Spl.C.C.No.5/2010 disbursed to M/s. Stratycon Technologies Pvt. Ltd., without any sanction order. The said loan was disbursed without any sanction.
It is not the case of accused No.1 that these Ex.P5, 6, 7, 9, and 10 were altered or overwritten before those documents come to his hands. The evidence of PW.3 clearly shows that accused No.1 had made the said alteration and also in Ex.P8 sanction communication letter. There was no necessity to the accused No.1 to alter or overwritten in the said documents. In view of these alteration made in those documents, it can be said that these documents are forged and false documents. These documents are forged with an intention to help the said M/s. Stratycon Technologies Pvt. Ltd., to avail loan of Rs.60 lakhs. Accused No.1 being branch head and public servant has to act fairly and honestly, but he forged the said documents and acted dishonestly. This conduct of accused No.1 is not correct. It is clear that accused Nos.1, 2 and 3 colluded and criminally conspired together in order to facilitate CCM limit loan upto Rs.60 lakhs to M/s. Stratycon Technologies Pvt. Ltd. The said 148 Spl.C.C.No.5/2010 documents were altered and the said documents fraudulently and dishonestly created with an intention to cheat the bank. Accused No.1 has committed criminal breach of trust by abusing his power. Thus, accused Nos.1, 2, and 3 have committed the offences punishable under Sections 120-B, 420, and 468 of IPC and accused No.1 has committed the offence punishable under Sections 409 and 471 of IPC.
Additional Cash Credit (miscellaneous) loan of Rs.40 lakhs and Rs.50 lakhs :-
40. (a). It is the case of the prosecution that accused No.1 had sanctioned additional limit of Rs.40 lakhs on 11.03.2008 and had sanctioned further additional limit of Rs.50 lakhs on 13.03.2008 without obtaining applications from the borrower, and additional securities against the same.
There is no dispute regarding the said amounts sanctioned to M/s. Stratycon Technologies Pvt. Ltd. Totally sanctioned an amount of Rs.1.50 crores i.e., on 30.10.2007 sanctioned CCM Limit of Rs.60 lakhs and on 11.03.2008 enhanced from Rs.60 lakhs to Rs.1 crore and 149 Spl.C.C.No.5/2010 on 13.03.2008 enhanced from Rs.1 crore to Rs.1.50 crores.
40.(b). It is relevant to state that there are no applications or any other materials to show that there was a demand or proposal by the said M/s. Stratycon Technologies Pvt. Ltd., seeking additional amount of Rs.40 lakhs on 11.03.2008 and Rs.50 lakhs on 13.03.2008. There are no documents or materials to show that any properties have taken as security to the said additional loan amount. The properties which are offered as collateral security to the secured loan of Rs.30 lakhs are taken as continuing security to the CCM Limit of Rs.60 lakhs. I have already discussed regarding this aspect. The total value of the said two properties is Rs.35.36 Lakhs. The said properties are inadequate to the CCM Limit of Rs.60 lakhs which disbursed to the said company. The bank has not taken any fresh collateral securities to the enhanced additional loan limit of Rs.40 lakhs and Rs.50 lakhs. In other words, what are the properties taken as collateral security to the CCM Limit 150 Spl.C.C.No.5/2010 loan is not sufficient to cover the risk of total amount of Rs.1.50 crores.
Accused No.1 being the Branch Manager has power to sanction and grant the loan. But at the same time, he has to take proper and adequate collateral securities to the loan disbursed by him. Accused No.1 has not at all taken collateral securities to the additional CCM limit of Rs.40 lakhs and Rs.50 lakhs. As I have already stated there is no proper and adequate collateral security to the said loan of Rs.1.50 crores. These two additional loans granted within three days (on 11.03.2008 and 13.03.2008) to the said company without taking any securities to these loans. These are all clearly shows that accused Nos.1 to 3 colluded together and criminally conspired relating to these loan transactions with an intention to cheat the bank.
40.(c). Ex.P34 is the office note dated 11.03.2008 prepared by Chief Manager (accused No.1). It is stated that M/s. Stratycon Technologies Pvt. Ltd., has applied for CCM limit of Rs.300/- lakhs to meet their working capital requirement. Due to shortage of office 151 Spl.C.C.No.5/2010 staff the process of the proposal could not completed for onward submission. Due to the urgency of the party, the ad-hoc addition limit of Rs.40 lakhs may be allowed to the said company. Ex.P35 is the office note prepared by the Chief Manager - accused No.1 on 13.03.2008 in respect of additional limit of Rs.50 lakhs. In this office note stated that the facts what are all stated in Ex.P34. Both these documents are addressed to B. Jagadish Shetty/Pramoda Shetty and stated that 'please update the above in the system.' PW.7 - Jagadish Shetty has deposed in the evidence that after receiving Ex.P34 he has shown the credit limit of the above said company to Rs.100 lakhs from Rs.60 lakhs in the system. He has also stated that as per Ex.P35 office note he modified the CCM limit to Rs.1.50 lakhs in the system in respect of said M/s. Stratycon Technologies Pvt. Ltd. He has further deposed that accused No.1 has not taken any additional security from the said company for enhancement of CCM limit as per Ex.P34 and 35. PW.25 - Smt. Pramoda Shetty has deposed in supporting the evidence of PW.7 and she has 152 Spl.C.C.No.5/2010 stated that said PW.7 has changed the amount as per Ex.P34 and 35 in the system. Accused No.1 himself has verified the said changes made in the system. In respect of the said changes made as per Ex.P34 and 35 in the system, accused No.1 is the checker and Jagadeesh Shetty (PW.7) is the maker. This evidence is not disputed in her cross-examination.
Counsel for accused No.1 has contended that for enhancement of any amount in the system (computer) two persons are necessary i.e., maker and checker. Hence, the persons who changed the amount in the system are also responsible for enhancement of the amount in the system. In other words, PW.7 is also responsible for enhancing the amount in the system.
Ex.P77 is the letter dated 21.10.2008 written by Radhakrishna Shetty (accused No.1) to the Chief Manager, Vijaya Bank, Koramangala, Bengaluru. It is stated that 'all the instructions in the account of M/s. Stratycon Technologies Pvt. Ltd., I am personally responsible for authorization and approval. All the staff members who have initiated and authorized these 153 Spl.C.C.No.5/2010 transactions in the system as maker and checkers have done so as per my instructions and directions.' It is clear that accused No.1 is responsible for the changes made in the system, because as per his instructions only, the changes made in the system. In the cross-examination of PW.7, counsel for accused No.1 has not elicited anything to show that the said letter was written due to force, threat or coercion by his (accused No.1) higher officers. In the cross-examination nothing is elicited to disbelieve or discard this document. As I have already stated accused No.1 is responsible for changes made changes in the system regarding enhancement of CCM limit. Under these circumstances, the above said contention of counsel for accused No.1 is not acceptable.
40.(d). PW.9 - D.C. Krishnappa has deposed in his cross-examination in para 26 at page 22-23 regarding Ex.P34 and 35. He has stated that the Branch Head without proper appraisal and without request of the borrower and without obtaining the financial statements, without making proper assessment of the requirement of the borrower, enhanced the CCM limit to Rs.150 lakhs. 154 Spl.C.C.No.5/2010 To enhance the CCM limit, the value of the security has been wrongly shown as Rs.325 lakhs instead of Rs.35.36 lakhs.
Ex.P47 is the copy of sanction proceedings register for Ad-hoc sanctions for the month of August 2007 to December 2007, and March 2008 (totally 15 sheets). PW.3 - Gurudatta Shenoy has deposed in the evidence at para 51 regarding this documents. He has stated the said documents as control return forms. Said documents sent to regional office by Vijaya Bank, Koramangala Branch, Bengaluru. He has further deposed that the cheques passed in the CCM account of M/s Stratycon Technologies Pvt. Ltd., were not reported in the above said control returns to the regional office except for Rs.3,16,454/- as per Ex.P.47(a). He has further deposed in para 52 of his evidence that MR-25A is a control return for credit limit sanctioned by the Branch reported to the Regional Office. MR-25A is the statement for the months of August 2007, October 2007 to December 2007, and January 2008 to March 2008 submitted to Regional Office by Vijaya Bank, Koramangala Branch 155 Spl.C.C.No.5/2010 consisting of 9 sheets and they are together marked as Ex.P.48. He has stated that all loans sanctioned by the Branch has to be reported to the regional office through MR-25A form. Except the secured loan of Rs.60 lakhs dated 06.02.2008 granted to M/s Stratycon Technologies Pvt. Ltd., as per Ex.P.48(a) no other loans namely the CCM loan and one more secured loan of Rs.30 lakhs has not been shown in the same. PW.31 - B. Rajagopal Rai has deposed in para 12 at page 5 that in Ex.P.47 and Ex.P.48 except sanction of TOD there is no mention about rising of the CCM limit or about the secured loans.
It is relevant to state that if there is a fair transaction by accused No.1 in sanctioning CCM Limit loan of Rs.60 lakhs, and enhancing the same upto Rs.1.50 crores, there is no any hesitation to him to report the same to the regional office, but he has not reported the same. These are all clearly shows that the act of accused No.1 in sanctioning the CCM loan of Rs.60 lakhs and enhancing the CCM loan upto Rs.1.50 crores is not good and correct and he made the said transaction colluding with accused Nos.2 and 3.
156 Spl.C.C.No.5/2010
PW.7 - Jagadeesh Shetty has deposed in the evidence at para 37 that Ex.P91 is the quarterly credit monitoring report (QCMR), and accused No.1 has sent the said report to the regional office. This document admitted in his evidence subject to admissibility of the same. It is relevant to state that it is not stated in the evidence that what objection raised by the defence counsel. There is a seal of the bank and signature of the concerned officer in this document. There is no any impediment to admit this document in evidence. Hence, I hold that it is admissible in evidence. He has further deposed that the said statement is dated 31.12.2007 (It is the statement for quarter ending 31.12.2007), and on that day the CCM limit was Rs.60 lakhs, but in Ex.P91 the limit is shown as Rs.130 lakhs wrongly. PW.9 - D.C. Krishnappa has deposed in the evidence at para 29 that in Ex.P91 CCM limit sanction is shown as Rs.130 lakhs and the balance outstanding is shown as Rs.68.32 lakhs as on 31.12.2007. After perusing Ex.P4 statement of account he has stated that the limit sanctioned is shown as Rs.130 lakhs in Ex.P.91 instead of Rs.60 lakhs. He has 157 Spl.C.C.No.5/2010 voluntarily stated that the actual balance as on 31.12.2007 in CCM limit was Rs.68.32 lakhs against the sanctioned limit of Rs.60 lakhs, but the limit was increased to Rs.130 lakhs in the QCMR (Ex.P.91) to conceal the fact of overdrawing in the CCM limit.
It is clear from the above said documents and the evidence of the witness that accused No.1 has not stated true facts or correct facts regarding the CCM limit in the said reports.
40.(e). PW.3 - B. Gurudatta Shenoy has deposed in para 35 at page 15 that in respect of loans of Rs.1 crore and above status report has to be submitted by the Bank duly authorized by the chartered accountant to the Regional office under AAMIS-14. The copy of the same will be maintained in the Branch Head. Ex.P33 is the status report of all borrowal accounts with aggregate limit/outstanding balance of Rs.1 crore and above (both fund based and non-fund based put together) for the quarter ended 31.03.2008. He has stated that in Ex.P.33 page No.2 Sl.No.13 the CCM account of M/s Stratycon Technologies Pvt. Ltd., limit sanctioned is reported as 158 Spl.C.C.No.5/2010 Rs.3 crores, but actually the CCM amount has been sanctioned Rs.1.50 crores. It is mentioned in Ex.P.33 that there is hypothecation of book-debts, but as per the loan documents it is the hypothecation of software and hardware. The mortgage value is actually Rs.30 lakhs but reported in Ex.P.33 as Rs.3.25 crores. In the same it is mentioned that the charge is registered with the Registrar of companies, where as no charge has been created with the Registrar of Companies. In last page of Ex.P.33 in the column Branch Manager's overview it is stated that "operation in the account is regular and satisfactory and the repayment of the term loan is regular, whereas in fact the account is highly irregular and unsatisfactory." The said document is prepared by the branch head - accused No.1 in his handwriting and he has signed the same as per Ex.P.33(a).
Ex.P100 is the status report of all borrowal accounts with aggregate limit/outstanding balance of Rs.1 crore and above (both fund based and non-fund based put together) for the quarter ended 30.06.2008. 159 Spl.C.C.No.5/2010
PW.9 - D.C. Krishnappa has deposed in the evidence at para 24 that in Ex.P.100 secured loan of Rs.60 lakhs sanctioned is reported as Rs.65 lakhs. For all the loans sanctioned as mentioned in Ex.P.100, the value of security taken is mentioned as Rs.325 lakhs whereas actual security available was Rs.35.36 lakhs only. In this report the outstanding balance in respect of secured loan of Rs.30 lakhs, the outstanding balance is shown as Rs.25.75 lakhs as per Ex.P.100(b), and in respect of secured loan of Rs.60 lakhs, which is shown as Rs.65 lakhs, the balance outstanding is shown as Rs.60 lakhs. In respect of CCM limit of Rs.60 lakhs, the balance outstanding is shown as credit balance of Rs.1.06 lakhs.
It is clear from the evidence and Ex.P33 and 100 that accused No.1 has not stated correct facts or true facts regarding all type of loans sanctioned by him to M/s. Stratycon Technologies Pvt. Ltd. All these acts of accused No.1 is not good and proper. He has suppressed the real facts to the regional office regarding the loan sanctioned by him to M/s. Stratycon Technologies Pvt. 160 Spl.C.C.No.5/2010 Ltd., and other aspects relating to the said loans. If he is really fair in sanctioning and disbursing all these loans, and correct transactions made by him in respect of sanction and disbursing the loans and taking proper collateral security and other aspects, he could have shown the true facts in the said reports, but he has not stated the true facts / actual facts. These are all clearly shows that the acts and conduct of accused No.1 in granting and disbursing the loans to M/s. Stratycon Technologies Pvt. Ltd., is not good and proper, and he has not followed the prescribed procedure regarding the said loans.
41. The case of the prosecution is that a cheque bearing No.925244 for Rs.60,07,020/- dated 26.03.2008 was issued in favour of M/s. Sughosh Advertising, and the same came to be deposited in the account held at Corporation Bank, BTM Layout Branch, Bengaluru, and M/s. Sughosh Advertising is a non existing firm and the same was being operated by accused No.5 - Smt. Greeshma, who is Assistant (HR) of M/s. Stratycon 161 Spl.C.C.No.5/2010 Technologies Pvt. Ltd., Bengaluru. It is further contended that she had actively participated in cheating by carrying out the transaction in the name of non-existing firm.
It is necessary to see that M/s. Sughosh Advertising is in existence or not. Ex.P202 is the account opening form. It appears that Smt. Greeshma has given this application on 28.03.2008 to open the current account in Corporation Bank, BTM Layout, Bengaluru, and the account was opened. Account Number is CBCA-1000087. Ex.P202(a) is the letter of proprietorship dated 28.03.2008. It is stated that she is the proprietor of said M/s. Sughosh Advertising. Along with the said application, she has produced copy of registration certificate (Form-C) issued by Labour Inspector. It is written on the said document as "original verified on 28.03.2008." The address of said M/s. Sughosh Advertising is No.66, BHECS Layout, II Floor, BTM Layout II Stage, Bengaluru-76. The said firm was registered on 26.03.2008. PW.21 -Laxman B. Bhajanthri has deposed in the evidence in supporting the said document. He has 162 Spl.C.C.No.5/2010 stated that said M/s. Sughosh Advertising is a proprietary concern.
Ex.P213(b) is attested copy of Form-A. It appears that Smt. Greeshma, Proprietor of said M/s. Sughosh Advertising has given an application to the office of the Labour Inspector for registration of the same. PW.22 - A.M. Krishnamurhty, Labour Officer has deposed in the evidence regarding this document. He has also deposed regarding Ex.P213(c) - attested copy of the B-Register (B-Form). It appears that Smt. Greeshma is Proprietor of M/s. Sughosh Advertising, and it is registered on 26.03.2008. It is clear that M/s. Sughosh Advertising is in existence. Hence, the contention of the prosecution that said M/s. Sughosh Advertising is not in existence is not acceptable.
42. PW.3 - B. Gurudatta Shenoy has deposed in the evidence in para 17 that on 26.03.2008 DD has been issued favouring M/s. Sughosh Advertisement for Rs.60 lakhs debiting to CCM account of M/s Stratycon Technologies Pvt. Ltd. The relevant entry regarding the same is at Ex.P.4(f). Ex.P4 is the extract of statement of 163 Spl.C.C.No.5/2010 account pertaining to Account No.139406011000096 of M/s Stratycon Technologies Pvt. Ltd. Ex.P15 is the cheque bearing No.925244 for Rs.60,07,020/-dated 26.03.2008 issued in favour of M/s Stratycon Technologies Pvt. Ltd., drawn on Vijaya Bank, Koramangala Branch. Ex.P16 is the challan dated 26.03.2008. In this challan shown the amount of Rs.60,00,000/- and separately shown Rs.7,020/-, total Rs.60,07,020/-. Ex.P17 is the copy of the DD for Rs.60,00,000/- dated 26.03.2008. It is issued by Vijaya Bank, Koramangala Branch. There is an entry in Ex.P4 relating to this amount of Rs.60,07,020/- which is marked as Ex.P4(f). Ex.P203 is the statement of account extract pertaining to account No.CBCA 1/000087 of M/s. Sughosh Advertising. It appears that an amount of Rs.60 lakhs was credited to the account of said M/s. Sughosh Advertising on 29.03.2008.
Regarding the above transactions, some questions put to accused No.5 in the statement of accused recorded under Section 313 of Cr.P.C. Q.No.35 put to her regarding issue of DD on 26.03.2008 in favour of M/s. 164 Spl.C.C.No.5/2010 Sughosh Advertising. For that she has answered that M/s. Sughosh Advertising is a sister concern of M/s. Stratycon Technologies Pvt. Ltd., and said M/s. Stratycon Technologies Pvt. Ltd., asked her to open an account and she has signed, but advertising was done by M/s. Stratycon Technologies Pvt. Ltd., in 1000 autos, paper holdings, banner etc., and done lot of advertisement. Q.No.50 put to her regarding issue of DD for the said amount and further stated that the said DD was sent to Vijaya Bank, Koramangala Branch for encashment from Corporation Bank, and on discrete enquiry with Corporation Bank, it was reported that Sughosh Advertising is a proprietary concern operated by Smt. Greeshma (accused No.5), wife of accused No.2 and she was also an employee of M/s. Stratycon Technologies Pvt. Ltd. She has answered to this question that she was employee of M/s. Stratycon Technologies Pvt. Ltd., but she is not the wife of accused No.2 and her husband is Late Prashanth Srinivas, and she was the proprietor of M/s. Sughosh Advertising as per the direction of M/s. Stratycon Technologies Pvt. Ltd., and it was doing 165 Spl.C.C.No.5/2010 advertisement and she has signed the cheques regarding advertisements done.
43. It is clear from the above evidence and documents that M/s. Sughosh Advertising Firm was registered on 26.03.2008 in the concerned Labour Office and it came into existence on 26.03.2008. There are no documents to show that prior to 26.03.2008, said firm was in existence. Ex.P15, 16, and 17 shows that a cheque for an amount of Rs.60,07,020/- was issued by M/s. Stratycon Technologies Pvt. Ltd., on 26.03.2008 in favour of M/s. Sughosh Advertising and on the same day said firm came into existence. Accused No.5 opened the bank account in Corporation Bank on 28.03.2008. Said M/s. Sughosh Advertising is a sister concern of M/s. Stratycon Technologies Pvt. Ltd., and Smt. Greeshma - accused No.5 is an employee of said M/s. Stratycon Technologies Pvt. Ltd., and she is the proprietor of said M/s. Sughosh Advertising as per the direction of M/s. Stratycon Technologies Pvt. Ltd. It is clear that actually she is not a proprietor of said M/s. Sughosh Advertising, but she is a proprietor of the said firm in the documents 166 Spl.C.C.No.5/2010 stated above and M/s. Stratycon Technologies Pvt. Ltd., has been doing the business of said M/s. Sughosh Advertising, and the above said amount of Rs.60,07,020/- came to her account on 29.03.2008. All these facts clearly shows that she had actively participated in cheating the bank by carrying out the transaction in the name of M/s. Sughosh Advertising firm which came into existence only on 26.03.2008, on which day a cheque for Rs.60,07,020/- was issued in the name of said M/s. Sughosh Advertising. Thus, she has committed the offences punishable under Sections 120-B and 420 of IPC.
44. In respect of CCM limit loan of Rs.60 lakhs and additional CCM limit of Rs.40 lakhs and further additional CCM limit of Rs.50 lakhs (totally Rs.1.50 crores), accused Nos.1, 2, 3 and 5 have colluded together, and they have criminally conspired in got releasing the said amount from Vijaya Bank in favour of M/s. Stratycon Technologies Pvt. Ltd., and in that process accused No.1 has created some forged documents and used the same as genuine documents 167 Spl.C.C.No.5/2010 knowing fully well that said documents are altered/overwritten by him, and sanctioned loan and thereby committed criminal breach of trust and cheated Vijaya Bank and helped M/s. Stratycon Technologies Pvt. Ltd., to avail the above said loan amount. Thus accused No.1 has committed the offences punishable under Sectiona 120-B, 409, 420, 468 and 471 of IPC, and accused Nos.2, 3 and 5 have committed the offences punishable under Sections 120-B, and 420 of IPC.
Secured Loan of Rs.60 lakhs :-
45. (a). The case of the prosecution is that on 07.02.2008 the bank had sanctioned secured loan of Rs.60 lakhs in the name of M/s. Stratycon Technologies Pvt. Ltd., for the purpose of purchase of GSM Software, and Home Automation Systems with Accessories. Rs.60 lakhs came to be transferred in favour of Cash Credit (Misc.) Account No.139406011000096 of M/s. Stratycon Technologies Pvt. Ltd., held at Vijaya Bank, Koramangala Branch, Bengaluru on 07.02.2008. The said amount was further transferred to current account of M/s. SLV Solutions, No.66, BHECS Layout, 2nd Main, BTM Layout, 168 Spl.C.C.No.5/2010 2nd Stage, Bengaluru held at State Bank of India, J.P. Nagar Branch Bengaluru through RTGS. Said M/s. SLV Solutions is a non-existing firm held in the name of Ms. Vidya Lakshmi D/o Ramaiah Setty (accused No.3). The said current account was opened on 23.01.2008 i.e., just about 15 days prior to sanction of said loan of Rs.60 lakhs, and the firm had not supplied any computer hardware/software against the payment, and the entire amount was withdrawn in cash by accused Nos.3 - Ramaiah Setty and accused No.4 - Sri. Vinay K.R. It is further case of the prosecution that the legal scrutiny report regarding property held at No.50/1, Kailasanahalli, Jigani Hobli, Anekal Taluk, Bengaluru District submitted by Sudhakar Shettigar, Panel Advocate, resident of Indiranagar, 2nd Stage, Bengaluru was held in the name of Sri. Veerasham resident of No.15/1, 3rd Main, NT Pet, Bengaluru, and the said property was valued at Rs.2,91,39,300/- by Udayakumar Shetty, approved valuer, and the same was later valued by Nutan Shetty V., Valuer, resident of Chandra Layout, Nagarbhavi Post, Bengaluru at Rs.3,26,70,000/-. No equitable mortgage 169 Spl.C.C.No.5/2010 of the said property was created in favour of the bank, and the original title of the said property came to be returned during the pendency of the repayment of loan, thereby leaving the loan totally unsecured.
45.(b). Ex.P214 is the appraisal note/process note dated 15.02.2008. It is stated in this note that the company has applied for a secured loan of Rs.60 lakhs to purchase new 145 numbers of GSM modem and accessories for a total cost of Rs.37,70,000/- and 200 numbers of home automation and accessories for total cost of Rs.37,44,000/- in order to develop their business by way of innovative ideas/techniques towards vehicle management system and home automation to develop and to streamline the business. It is not stated that when the said company has applied for this loan. But in first page of this note it is stated that the date of receipt of proposal is 15.01.2008 and date of receipt of full particulars is 02.02.2008. In this note (Ex.P214) recommendation made to sanction of secured loan of Rs.60 lakhs. It is also stated in this document that placed it before BLCC for clearance. There is name of 170 Spl.C.C.No.5/2010 Jagadeesh Shetty, Manager (Loans), and Mrs. Jayashree, Manager. It is also stated that the competent authority is Chief Manager. But there is no signature of all these persons in Ex.P214. There is no order or endorsement by the BLCC, or Chief Manager (accused No.1) or by his higher authority about sanction of said loan. In other words, this loan has not at all sanctioned by the Bank.
PW.23 - P. Chandrashekar has deposed in the evidence that he had worked as Senior Branch Manager in Vijaya Bank, Koramangala Branch, Bengaluru from 15.05.2008 to 28.08.2008. At that time, accused No.1 was working as Chief Manager of the above said Branch, and he (PW.23) was looking after the internal functioning of the said Branch. He further deposed that accused No.1 had given the manuscript of the same, and hence he typed the same in the office computer system and gave the same to accused No.1 along with the manuscript. The said document does not contain the signature of any loan officers or the Chief Manager, but, it was typed by him and he also took out the print out and gave the same to accused No.1. The date 171 Spl.C.C.No.5/2010 05.02.2008 is mentioned in the manuscript and the same date is mentioned in Ex.P214. In the cross-examination he has deposed in para 12 at page 12 that the loan application and the sanction order has to be in the Bank only, and the CBI Officer did not ask him to produce them. If really the application given by the said company to the bank for this loan and sanction order was passed by accused No.1 or by his higher officer, the same should be kept in the bank, and if they were in the bank and followed the correct procedure regarding the said loan transactions, certainly, counsel for accused No.1 would have filed the necessary application for summoning the said documents before the Court to show that there is no any irregularities in sanctioning and granting the said loan, but they have not at all filed any application for summoning the said documents. Further, the loan application, and sanction order are not before the Court. Apart that, as I have already stated Ex.P214 is not signed by the loan officers or by any officer of the bank, and there is no any endorsement or order to show that the said loan has been sanctioned. It is clear that there 172 Spl.C.C.No.5/2010 is no loan application, and sanction order regarding this loan of Rs.60 lakhs, in spite of it the bank has disbursed the secured loan of Rs.60 lakhs to M/s. Stratycon Technologies Pvt. Ltd. It appears that Ex.P214 prepared on 15.05.2008 or subsequent to it, because PW.23 had been working in the said bank since 15.05.2008 and this Ex.P214 prepared by him as already stated. It is prepared after three months from the date of disbursement of the said loan of Rs.60 lakhs on 07.02.2008.
In the said Ex.P214 - Process Note stated regarding collateral securities offered to this loan. It is a residential property totally measuring 32670 sq.ft., situated in Sy.No.50/7 of Kyalasanahalli Village, Jigani Hobli, Anekal Taluk, Bengaluru valued at Rs.291.39 lakhs as per valuation report of K. Udaya Kumar Shetty dated 28.12.2007 held in the name of Veeresham. It is also stated in respect of continuing security of land and building at Site No32, and site No.88 situated at Sri. Hanuman Township Neraluru Panchayath, Anekal Taluk, Attibele Hobli, Bengaluru District. These properties were 173 Spl.C.C.No.5/2010 offered as collateral security to the secured loan of Rs.30 lakhs sanctioned on 11.09.2007. It is stated that these properties are continuing collateral securities to this loan of Rs.60 lakhs also.
Ex.P221 is the legal scrutiny report dated 23.10.2007 in respect of site No.32, situated at Sri Hanuman Township, yadavanahalli, Hosur Main Road, Attibele Hobli, Anekal Taluk submitted by S. Sudhakara Shettigar (PW.29). Ex.P222 is the legal scrutiny report dated 20.11.2007 in respect of site No.88, situated in a land bearing Sy.No.38/1 of Yadavanahalli Village, Attibele Hobli, Anekal Taluk, Bengaluru District submitted by S. Sudhakara Shettigar (PW.29). Ex.P223 is the legal scrutiny report dated 02.01.2008 in respect of title deeds of the property bearing Sy.No.50/1, measuring 30 guntas situated at Kyalasanahalli Village, Jigani Hobli, Anekal Taluk submitted by Sudhakara Shettigar (PW.29).
Ex.P253 is the valuation report dated 26.06.2008 in respect of the property bearing Sy.No.50/7, situated at Kyalasanahalli Village, Jigani Hobli, Anekal Taluk, Bengaluru submitted by Sri. Nutan Shetty T (PW.34). It 174 Spl.C.C.No.5/2010 appears that the valuer had inspected the said property on 24.06.2008 and submitted this report on 26.06.2008 to Vijaya Bank, and the property valued at Rs.3,26,70,000/-. It is relevant to state that Ex.P214 - process note was prepared on 05.02.2008, thereafter this valuation report submitted by said Nutan Shetty T on 26.06.2008. It is huge loan of Rs.60 lakhs, and before preparing the process note and considering the matter of loan, the branch head - accused No.1 should have obtain the valuation report, and it is not proper to proceed to prepare process note and considering the proposal for grant of loan without taking valuation report. The said valuation report submitted after preparation of process note, it is not good and correct.
45.(c). It is the case of the prosecution that no equitable mortgage was created in respect of this property in favour of the bank and original title deeds of the property came to be returned during the pendency of the repayment of loan thereby leaving the loan totally unsecured. The Branch Head/Chief Manager should have created equitable mortgage over the said property in 175 Spl.C.C.No.5/2010 favour of the bank when the bank is advancing huge loan of Rs.60 lakhs and also create the charge over the said property, but no equitable mortgage created over this property (and no charge was created on the fixed assets of the company in the records of the Registrar of Companies, Kendriya Sadan, Koramangala, Bengaluru). Apart that the original title deeds of the property came to be returned during the pendency of the repayment of loan, thereby leaving the loan totally unsecured.
It is relevant to state that accused No.1 being he branch head/Chief Manager may have absolute power or discretion power to sanction the loan. He may exercise the power in sanctioning the loan, but at the same time he should see that how much amount to be advanced to the customers, and how the said loan amount would be recovered. He should not have ignored this fact, but he has not at all taken care in these aspects before sanction and disbursing the said loan amount. All these facts clearly shows that accused No.1, who is the branch head, and accused Nos.2 and 3 who are directors of M/s. Stratycon Technologies Pvt. Ltd., colluded together and 176 Spl.C.C.No.5/2010 criminally conspired and fraudulently and dishonestly cheated the bank by disbursing the said loan amount to the said company.
46. (a). The prosecution has contended that M/s. S.L.V. Solutions, No.66, BHECS Layout, 2nd Main, BTM Layout, 2nd Stage, Bengaluru is a non-existing firm held in the name of Ms. Vidya Lakshmi, and the said firm had not supplied any computer hardware/software to M/s. Stratycon Technologies Pvt. Ltd., against the payment of Rs.60 lakhs to M/s. S.L.V. Solutions.
Ex.P29 is a quotation dated 21.12.2007 issued by SLV Solutions No.34, 1st Floor, 3rd Cross, 10th Main, Banashankari 3rd Stage, Bengaluru to M/s. Stratycon Technologies Pvt. Ltd. It is stated about supply of IBM Server, H.P. Proliant, GSM Modem and Accessories, Home automation and accessories, and other materials and cost of the same is Rs.1,75,33,152/-. Ex.P31 is the receipt dated 08.02.2008 issued by the said SLV Solutions. It appears that said firm has received a sum of Rs.60 lakhs through RTGS from Vijaya Bank on 07.02.2008 drawn on SBI for supply of GSM modem and 177 Spl.C.C.No.5/2010 home automation with accessories. It is stated that the customer name is Vijaya Bank, account M/s. Stratycon Technologies Pvt. Ltd. It is unstamped receipt. The said firm is different from M/s. SLV Solutions, No.66, BHECS Layout, 2nd Main, BTM Layout, 2nd Stage, Bengaluru, because address of these two firms are different.
Ex.P49 is the account opening form of SBI. It appears that on 23.01.2008 Ms. Vidya Lakshmi K.R., has given this application to SBI for opening a new account in that Bank in the name of SLV Solutions, and the address of the registered office mentioned as #66, II Floor, BHECS Layout, 2nd Main, BTM Layout, 2nd Stage, Bengaluru, and also mentioned the address of business as #519, 2nd Floor, 10th Cross, 12th main, Padmanabha Nagar, Bengaluru. The current account number of said Vidya Lakshmi K.R., is 30315364673. Ex.P50 is the registration certificate (Form-C) issued by office of the Labour Inspector, Bengaluru. It appears that the owner of SLV Solutions is Ms. Vidya Lakshmi K.R., d/o. Ramaiah Setty and address mentioned as #No.66, 2nd Floor, BHECS Layout, 2nd Main, BTM Layout 2nd Stage, 178 Spl.C.C.No.5/2010 Bengaluru, and nature of business is mentioned as computer sales and services. The said firm was registered on 21.01.2008.
Ex.P51 is the copy of rental agreement dated 24.12.2006. It is an agreement between said Ms. Vidya Lakshmi K.R., and Smt. K. Jamuna-owner of the house in respect of the said building. Ex.P52 is the copy of PAN card of Vidya Lakshmi K.R. PW.4 -A. Gopal, Manager of the Bank has deposed in the evidence that in the year 2008 he was working as Manager, Branch Administration, State Bank of India, J.P.Nagar Branch, Bengaluru. He deposed regarding current account opened by Vidya Lakshmi K.R. in the said bank and also deposed in respect of the said documents. He has stated that as per Ex.P.49 S.L.V. Solutions is a Proprietary concern and the proprietor is K.R.Vidhyalakshmi.
PW.14 -A.P. Pundalika Rao, Retired Labour Officer has deposed in the evidence that S.L.V. Solutions had been registered under Shops and Commercial Establishment Act. Ex.P123(b) is the certified copy of 179 Spl.C.C.No.5/2010 application (Form No.-A) given to Labour Office for registration of SLV Solutions, No.66, BHECS Layout, 2nd Main, BTM Layout, 2nd Stage, Bengaluru. Ex.P123(d) is the certified copy of registration certificate (Form-B) issued by the Labour Inspector, and mentioned address of the firm what is mentioned in Ex.P123(b). It appears from this document that Ms. Vidya Lakshmi K.R., is the proprietor of said SLV Solutions. He has deposed in respect of this document and other documents which are given with the application for registration of said SLV Solutions.
It is clear from the above evidence and documents that Vidya Lakshmi K.R., is the proprietor of SLV Solutions, No.66, BHECS Layout, BTM 2nd Stage, Bengaluru, and the said firm is in existence. The said firm had opened a current account in SBI, J.P. Nagar Branch, Bengaluru on 23.01.2008 ie., just 15 days prior to disbursement of secured loan of Rs.60 lakhs from Vijaya Bank.
PW.40 - Ms. Vidya Lakshmi has deposed in the chief examination that she has studied upto B.com., and 180 Spl.C.C.No.5/2010 her photo is there in Ex.P49. Ex.P.49 is the current account opening form. Her father told her that she has to sign Ex.P.49 as it will be helpful to the company, and his partner has also told him in that respect and hence she has signed Ex.P.49. She does not know whether the said current account was opened in the name of the company or not. Her signature is marked as Ex.P.49(c). Accused Nos.2 and 3 took her signatures to some blank cheques and she does not know what they did by obtaining her signature to some blank cheques. Her father told her that he is opening the above said current account for the company. She do not know from where the amount came into the above said current account and how much amount came to that current account and she do not know how much amount was withdrawn from the above said current account. Ex.P53 is the cheque bearing No.653909 for Rs.4,91,500/- dated 12.02.2008. Ex.P54 is the cheque bearing No.653908 for Rs.30,00,000/- dated 09.02.2008. Ex.P55 is the cheque bearing No.653907 dated 08.02.2008 for Rs.25,00,000/-. She has deposed that her signatures are there on the 181 Spl.C.C.No.5/2010 both sides of the said cheques. She has identified her signatures in the said cheques and her signatures are marked as Ex.P53(a) and 53(b), Ex.P.54(a) and (b), and Ex.P.55(a) and (b). She has further deposed that she do not know who has put the seals in Ex.P.53 to Ex.P.55 as Proprietor, S.L.V. Solutions. She has not filled up Ex.P.53 to Ex.P.55 but she has only signed. She does not know who has written the contents of Ex.P.53 to Ex.P.55. She has voluntarily stated that the partner of her father had insisted for opening the current account, and at the instance of the partner, her father took her signatures to the current account opening form and to the cheques. The prosecution has treated this witness as hostile. She has deposed in the cross-examination conducted by the prosecution that she has not stated before the CBI Officer that she had opened the current account in the name of S.L.V. Solutions as the proprietor of the same. She has not stated before the CBI Officer accordingly as per Ex.P.275. She had not personally opened any company by name S.L.V. Solutions and operated the same, but she only signed at 182 Spl.C.C.No.5/2010 the request of her father. Her father was the partner of M/s Stratycon Technologies Pvt. Ltd., with accused No.2. She does not know whether M/s Stratycon Technologies Pvt. Ltd., had borrowed huge amount of loan from Vijaya Bank, Koramangala Branch. She has further stated that she has not personally carried the business in the name of S.L.V. Solutions and she does not know where it was located. She does not know the address of S.L.V. Solutions mentioned in the current account opening form Ex.P.49. She does not know who has filled up the address of S.L.V. Solutions mentioned in Ex.P.49. She does not know whether her father opened the above said current account in the name of S.L.V. Solutions to divert the loan amount taken from Vijaya Bank, Koramangala Branch. She has denied that there was no insistence on accused No.3 by accused No.2 for opening the current account in the name of S.L.V. Solutions, and in order to help her father and accused No.2, she had opened the above said current account in the name of S.L.V. Solutions, and helped her father and accused No.2 to divert the loan amount taken 183 Spl.C.C.No.5/2010 from Vijaya Bank, Koramangala Branch. The counsels for accused persons have not cross-examined her.
It is clear from her evidence that she does not know anything about SLV Solutions mentioned in the bank account opening form (Ex.P49) and registration certificate and other documents. Even she does not know where the said firm is located. It is clear that as per the records, M/s. SLV Solutions is in existence and she is the proprietor of the same. But actually, this firm is not in existence and it is fictitious firm. It appears that said fictitious firm was operating by accused Nos.2 and 3 in the name of said Ms. Vidya Lakshmi K.R. Said SLV Solutions has not at all issued any quotations to M/s. Stratycon Technologies Pvt. Ltd., for supply of GSM modem and computer hardware and software, home auto machine with accessories, and the said firm had not supplied any such materials to M/s. Stratycon Technologies Pvt. Ltd.
Ex.P29 is the quotation dated 21.12.2007 and Ex.P31 is the receipt dated 08.02.2008 issued by SLV Solutions, No.34, 1st Floor, 3rd Cross, 10th Main, 184 Spl.C.C.No.5/2010 Banashankari 3rd Stage, Bengaluru, but the said firm is not in existence. In the cross-examination of PW.40, the accused persons have not elicited anything to show that SLV Solutions mentioned in Ex.P29 and 31 is in existence, and said Ms. Vidya Lakshmi is the proprietor of the said firm. While discussing in respect of secured loan of Rs.30 lakhs which sanctioned on 11.09.2007, I have discussed in detail regarding the said firm and held that the said firm is not in existence.
Ex.P29 is the quotation submitted by accused Nos.2 and 3 to the bank for disbursal of loan amount of Rs.60 lakhs and at that time, accused No.1 being the branch head could have insisted for documents to show that whether the said firm is authorized dealer or not regarding supply of materials mentioned in the said quotation, because it is a huge amount. If accused No.1 insisted for the same he could have know that the said firm is in existence or not. It appears that accused No.1 had disbursed the loan amount of Rs.60 lakhs without ascertaining that the said firm is in existence or not and it is an authorized dealer or not.
185 Spl.C.C.No.5/2010
Accused Nos.2 and 3 have created Ex.P29 quotation, which is a false document and thereby committed forgery and they have submitted the said quotation to the bank as genuine document, knowing fully well that the said document is a false document, and induced the bank to disburse the loan amount of Rs.60 lakhs and cheated the bank. These are all clearly shows that accused Nos.1, 2 and 3 colluded together and criminally conspired, and committed fraud in order to cheat the bank, and they cheated the bank.
46.(b). Vijaya Bank had sanctioned Rs.60 lakhs as secured loan to M/s. Stratycon Technologies Pvt. Ltd., and the said amount came to be transferred to Cash Credit (Misc.) Account No.139406011000096 of M/s. Stratycon Technologies Pvt. Ltd., in Vijaya Bank, Koramangala Branch on 07.02.2008. This fact is evident from Ex.P4- statement of account extract pertaining to the account of M/s. Stratycon Technologies Pvt. Ltd. Ex.P4(n) is the relevant entry. On the same day, the said company has transferred the said amount to the current account No.30315364673 of M/s. SLV Solutions, 186 Spl.C.C.No.5/2010 situated at BTM Layout, Bengaluru held in SBI through RTGS, and this fact is supported from Ex.P36. Ex.P36 is the RTGS form dated 07.02.2008. Ex.P56 is the statement of account extract relating to account No.30315364673 belongs to SLV Solutions, No.66, 2nd Floor, BHECS Layout, 2nd Main, BTM Layout 2nd Stage, Bengaluru. It appears that on the same day i.e., on 07.02.2008 the said amount of Rs.60 lakhs was credited to the account of the said SLV. It is relevant to state that as I have already stated it is a fictitious firm and the said firm had not at all supplied any materials i.e., computer hardware/software or home auto machine systems with accessories or any other materials to M/s. Stratycon Technologies Pvt. Ltd., for having received a sum of Rs.60 lakhs.
Ex.P53, 54 and 55 are the self cheques issued by Ms. Vidya Lakshmi K.R., for M/s. SLV Solutions. She has signed all these three cheques, and also signed on the backside of those cheques. Accused No.4 -Vinay K.R., has signed on the backside of Ex.P53 which is issued for Rs.4,91,500/-. Ramaiah Setty (accused No.3) has 187 Spl.C.C.No.5/2010 singed on the backside of Ex.P54, which is issued for Rs.30 lakhs. PW.4 -A. Gopal, Bank Manager, SBI, has deposed that the amount mentioned in Ex.P54 was received by Ramaiah Setty as he had brought the same on behalf of the proprietor. The cheque amount mentioned in Ex.P53 was received by Vinay K.R., as he had brought the cheque on behalf of the proprietor.
It appears from Ex.P56 statement of account that the amount of Rs.25 lakhs mentioned in Ex.P55 has been debited to the account of SLV Solutions on 08.02.2008 and Rs.30 lakhs mentioned in Ex.P54 has been debited on 12.02.2008. Except the amount of Rs.25 lakhs, which drawn by Ms. Vidya Lakshmi K.R., the remaining amount of Rs.34,91,500/- (Rs.30,00,000/- and Rs.4,91,500/-) drawn by accused No.3 - Ramaiash Setty, and his son Vinay K.R.(accused No.4). It appears that directors of M/s. Stratycon Technologies Pvt. Ltd., i.e., accused Nos.2 and 3 have got disbursed the loan amount of Rs.60 lakhs to the CCM account of M/s. Stratycon Technologies Pvt. Ltd., and paid the said amount to SLV Solutions, situated at BTM Layout, which is under proprietorship of Ms. Vidya 188 Spl.C.C.No.5/2010 Lakshmi K.R., and thereafter, accused Nos.3 and 4 got the amount of Rs.34,91,500/- from the said SLV Solutions, thus, they have fraudulently obtained the said amount from Vijaya Bank. In fact, accused Nos.2 and 3 have fraudulently and dishonestly got released the said loan amount of Rs.60 lakhs and cheated the bank.
47. Even though there is no loan application or demand for the loan by M/s. Stratycon Technologies Pvt. Ltd., and there is no sanction order, accused No.1 had disbursed the said loan amount of Rs.60 lakhs to M/s. Stratycon Technologies Pvt. Ltd. Accused Nos.2 and 3 being the directors of said company have created Ex.P29 quotation which is false and forged document and submitted the same to bank as genuine document knowing fully well that it is false document, and induced the bank manager - accused No.1 to release the said amount, and acting upon the said document, accused No.1 had released the said amount of Rs.60 lakhs to M/s. Stratycon Technologies Pvt. Ltd., and thereafter, accused Nos.2 and 3 have created Ex.P31 receipt to show that the said SLV had supplied GSM modem and home auto 189 Spl.C.C.No.5/2010 machine with accessories even though the firm SLV mentioned in the said document is not in existence. Actually, SLV Solutions, BTM Layout is also not in existence and not supplied any material to M/s. Stratycon Technologies Pvt. Ltd. Thus, accused Nos.2 and 3 have cheated the bank and got disbursed the loan amount of Rs.60 lakhs in the name of M/s. Stratycon Technologies Pvt. Ltd., and said company has transferred the said amount to the account of SLV Solutions, BTM Layout, Bengaluru. Thereafter, accused Nos.3 and 4 have drawn the portion of the amount as already stated. Apart that accused No.1 has not created equitable mortgage over the property which offered as collateral security to the said loan, in favour of the bank. The original title deeds of the property came to be returned to the concerned persons during the pendency of the repayment of loan. Thus the said amount of Rs.60,00,000/- left totally unsecured. The amount of Rs.60 lakhs disbursed by the bank was not at all utilized by the said M/s. Stratycon Technologies Pvt. Ltd., for what purpose it was released, and directors of the said 190 Spl.C.C.No.5/2010 company diverted the said amount other than the purpose disbursed. Accused Nos.1, 2, 3 and 4 colluded together and criminally conspired and created false documents and submitted to the bank to sanction and release the loan amount of Rs.60 lakhs, and the bank manager acted dishonestly and abused his power and released the said amount of Rs.60 lakhs. Thus accused Nos.1, 2 and 3 have committed the offences punishable under Sections 120-B, 420, 468 and 471 of IPC and accused No.4 has committed the offence punishable under Section 420 of IPC, and accused No.1 has committed the offence punishable under Section 409 of IPC in respect of said loan amount of Rs.60 lakhs.
Temporary Over Drafts (TOD) :-
48. The case of the prosecution is that Current Account No.139400301000330 was opened in the name of M/s. Stratycon Technologies Pvt. Ltd., at Vijaya Bank, Koramangala Branch, Bengaluru on 08.08.2007, and accused Nos.2 and 3 are the authorized signatories for operating the said account. Accused No.1-Radhakrishna Shetty had extended temporary over draft (TOD) of 191 Spl.C.C.No.5/2010 Rs.10,07,645/- on 14.08.2007, i.e., within a week from the date of opening of the current account. The accused No.1 had extended TOD upto Rs.13,99,495/-, and the same was grossly in excess of his delegated financial powers. The TOD beyond Rs.10 lakhs was to be reported to the Regional Manager, Vijaya Branch, Regional Office, Bengaluru (South), Primrose Road, Bengaluru. But he had concealed the TOD extended in excess of his delegated powers in gross violation of the procedures prescribed for the same.
PW.1 - K. Shantharama Kamath has deposed in the evidence that immediately after opening the account within seven days, the branch head - accused No.1 gave the company overdrawing in current account. Generally for a new party overdrawing will not be given, but against the Government cheques or cheques of a good company in favour of the above said company overdrawing could have been given. If the OD is drawn the said amount should be paid within 15 days.
PW.3- Gurudatta Shenoy after perusing Ex.P1- investigation report dated 14.11.2008, which submitted 192 Spl.C.C.No.5/2010 by him to Vijaya Bank, has deposed in the evidence that the current account was continuously overdrawn beyond the stipulated 15 days. On 29.08.2007 Rs.60 lakhs cheque was presented and paid to this current account and even after that the current account was overdrawn. On 30.09.2007, a cheque for Rs.13 lakhs was presented for the credit of the current account and sent in clearing. Said 30.09.2007 is a quarter end for the banking, and the said Rs.13 lakhs was credited but the cheque was returned on 03.10.2007 for insufficient funds. By giving the cheque as stated above the overdrawing in the current account was concealed as on 30.09.2007. Ex.P3 is the statement of account extract pertaining to the current account No.139400301000330 of M/s Stratycon Technologies Pvt. Ltd. There is an entry regarding said Rs.13 lakhs in Ex.P3 and the relevant entry is Ex.P3(a).
PW.8 - Ramakrishna Reddy, the then officer of Vijaya Bank has perused Ex.P3 and deposed in the evidence that on 14.08.2007 Rs.14,80,000/- has been passed and allowed temporary overdrawing of Rs.10,07,645/-. The current account was opened on 193 Spl.C.C.No.5/2010 08.08.2007 i.e., within five (5) days of opening of the current account the above said temporary overdrawing has been given. Usually after 5 or 6 months of the opening of the current account after seeing the performance of the current account holder, the temporary overdrawing will be allowed. Usually within 15 days, the temporary overdrawing has been regularized by paying the overdrawn amount. After 5 days of the overdrawing the payment has been made regarding overdrawing. Allowing of overdrawing should be reported to the regional office on the same day of overdrawing and get ratification of the same from the Regional office. He does not know whether the Regional Office has ratified the overdrawing or not.
PW.17 - Chandrashekar K., the then Senior Manager of Vijaya Bank has deposed in the evidence in para 1 at page 5 that at the time of recording his statement, the Investigating Officer shown the computer print out of the current account number 139400301000330 and asked him to say whether there is temporary overdraft. The said account belongs to M/s 194 Spl.C.C.No.5/2010 Stratycon Technologies Pvt. Ltd. By seeing Ex.P3 he has stated that as on 14.08.2007 there is withdrawal of Rs.14,80,000/- through cheque number 244905 and by passing the said cheque, the TOD was Rs.10,07,645/- as per Ex.P.3(i). That TOD has been given within six (6) days from the date of opening the current account. The Bank has to see the transactions in any current account for a period of six (6) months, and if there is a satisfactory transaction, then only the temporary overdraft has to be given. The above said TOD has been cleared on 18.08.2007. The cheque dated 14.08.2007 for Rs.14,80,000/- is marked as Ex.P.186(a). (I perused the said cheque. Its date is 13.08.2007). As per the temporary overdrawing register, accused No.1 has authorized the overdrawing stated above. It is clear that accused No.1 has allowed the said company for temporary overdrawing of Rs.10,07,645/- in the current account in the said bank.
PW.3 - B. Gurudatta Shenoy has deposed in the evidence in para 5 at page 3 that on 30.10.2007 a cheque for Rs.20 lakhs was presented and the amount of 195 Spl.C.C.No.5/2010 Rs.20 lakhs was debited from the above said current account as that cheque was issued by M/s Stratycon Technologies Pvt. Ltd. Hence the account was overdrawn. The relevant entry is Ex.P.3(c). The above said overdrawing is beyond the delegated power of accused No.1, and the amount was also allowed to be overdrawn beyond 15 days. Accused No.1 had also not submitted control return to the control office. He has further deposed in para 7 at page 4 that on 02.11.2007 Rs.9 lakhs cheque for cash withdrawal from current account was paid. The account was then running already in debit and there was further debit by paying Rs.9 lakhs stated above. The relevant entry is Ex.P.3(e). At that point of time the temporary overdrawing in current account by accused No.1 was upto Rs.10 lakhs only and the overdrawing should be regularized within 15 days. By withdrawal of Rs.9 lakhs there was overdrawing of Rs.13.21 lakhs as on 02.11.2007 which is more than Rs.10 lakhs. He has further deposed in para 8 at page 4 that on 17.11.2007 cheque for Rs.40 lakhs was paid in clearing by overdrawing the account. The said cheque 196 Spl.C.C.No.5/2010 was issued by M/s Stratycon Technologies Pvt. Ltd., in favour of Sri Durga. However, the account was brought to credit by debiting CCM account on 17.11.2007 to the extent of Rs.49 lakhs and crediting to the above said current account. The relevant entry is at Ex.P.3(f) PW.8 - Ramakrishna Reddy has deposed in the evidence in para 4 at page 3 that on 18.08.2007 Rs.10 lakhs has been credited to the current account and the account had credit balance on that day. On 28.08.2007 by receiving the cheque of Rs.4 lakhs and that cheque has been passed and allowed TOD of Rs.3,16,454/-. He has further deposed in para 5 at page 4 that again on 29.08.2007 a cheque of Rs.6 lakhs has been passed and allowed over drawings of Rs.9,17,866/- and it is continued with regular credits and debits which remained over drawings Rs.2,69,589/- upto 30th September, and on 30th September, Rs.13 lakhs cheque was presented in clearing and got the account into credit balance of Rs.10,30,411/-. On 03.10.2007, Rs.13 lakhs cheque has been returned due to insufficient funds and made the account to the debit balance of Rs.4,13,712/- which 197 Spl.C.C.No.5/2010 shows that Rs.13 lakhs cheque has been made window dressing to avoid the debit balance figures in the balance sheet of the Bank on 30.09.2007. Again on 17.11.2007 Rs.49 lakhs has been credited to the current account from CCM account and get the account into credit balance of Rs.39,72,037/- and again Rs.40 lakhs has been withdrawn on 17.11.2007 and allowed over drawings of Rs.59,004/- in the current account. On 22.11.2007 Rs.50,000/- has been credited, and on 21.11.2007 Rs.1 lakh has been credited and the account got credit balance of Rs.89,496/- on 22.11.2007. On 19.08.2008 Rs.81,100/- has been credited to the account and the account balance outstanding Rs.81,066/-. Meanwhile on 19.08.2008, the said amount has been withdrawn for the company salary purpose Rs.81,091/- and again loan installment has been debited Rs.81,066/- towards loan installments of the secured loan bearing account No.139409041000069 and the account bond to debit of Rs.81,091/- and the amount of Rs.87,051/- was transferred to suit filed account on 28.12.2008. On 28.12.2008 the Bank filed the suit to recover the debit 198 Spl.C.C.No.5/2010 balance. According to him the over drawings allowed in respect of the above said current account is wrong. He has deposed in the cross-examination in para 9 at page 7 that the TOD will be allowed in the current account itself subject to clearing of the same by the current account holder within 15 days. Counsel for accused No.1 has shown page No.31 of Ex.P.88 (Books on Delegation of Powers) to him and asked that, in the same, the financial limit of the Chief Manager is mentioned regarding Temporary over drawings. He has stated that according to the same, the Chief manager can allow the temporary over drawings upto Rs.10 Lakhs and that portion is already marked as Ex.P.88(a). Counsel for accused No.1 has shown Ex.P.248 to him. He has stated that it is the booklet on delegation of powers. He was also shown page No.22 and clause-E found in Ex.P.248 and he has stated that according to the same "all controlling authorities should inform the observations/decisions on all TOD/BP reports within a period of 15 days from its date of receipt, failing which the authority that allowed the bona-fide transaction can presume that the 199 Spl.C.C.No.5/2010 approval/ratification formalities is over". The above said clause is correct and it will be followed by all the Branches.
PW.9 - D.C. Krishnappa has deposed in the evidence at page 5 that in case of parties who are maintaining current account with the Branch with satisfactory average balance or having deposit relations by way of S.B. or term deposits, the delegates may allow or permit temporary overdrafts in current accounts keeping in mind the average balances maintained on all deposit accounts for the past six (6) months. The Chief Manager can sanction Rs.10 lakhs and this amount should be regularized within a maximum period of 15 days. If the overdrawing is not recovered within 15 days, the branch head should submit a report in the prescribed format to Regional Office informing the date of allowing the excess, etc. He deposed referring Ex.P88- Circular, and Ex.P88(a) is relevant portion.
PW.17 has deposed in para 5 at page 2 and 3 of his evidence that in respect of current account, the balance will be in credit balance generally, but in case of need 200 Spl.C.C.No.5/2010 temporary overdrawing will be given in the current account. It is the discretion of the Branch Manager regarding the temporary overdrawing limit and also the time within which it has to be repaid. He has deposed in the evidence in para 2 at page 6 that TOD of Rs.3,16,454/- granted on 28.08.2007 while passing the cheque bearing No.244947 for Rs.4 lakhs as per Ex.P.3(j), in the TOD granting register there will be mention about granting the TOD. The relevant entry is Ex.P224(b). As on 28.08.2007, there was TOD of Rs.3,16,454/- as per Ex.P3(j). He has further deposed in the evidence in para 3 at page 6 that thereafter also the account was in TOD upto 30.09.2007. On 30.09.2007 a cheque for Rs.13 lakhs was deposited by M/s Stratycon Technologies Pvt. Ltd., and the account was brought to credit balance and the said cheque was returned on 03.10.2007 dishonoured. Hence, again the TOD was Rs.4,13,712/- as on 03.10.2007. The relevant entry is Ex.P3(a) and (b). Thereafter, the account continued in TOD upto 30.10.2007. The account was brought to credit balance by granting a regular limit, i.e., CCM (cash 201 Spl.C.C.No.5/2010 credit miscellaneous) of Rs.20 lakhs and that amount was transferred to the above said current account and the account was brought to credit balance. The said amount of Rs.20 lakhs has been withdrawn on 30.10.2007 by way of cheque as per Ex.P.13 and the account was brought to debit balance of Rs.11,44,404/- as per Ex.P.3(c). The debit balance continued upto 17.11.2007. By transferring an amount of Rs.49 lakhs from CCM limit, the account was brought to credit balance. On the same day, a cheque of Rs.40 lakhs (Ex.P12) debited to the account bearing cheque No.249492 in favour of Sri Durga Enterprises. Then the account was brought again to debit balance of Rs.59,004/-. The relevant entries are Ex.P.3(g) and (f). The relevant entry in Ex.P.224 is at Ex.P.224(c). On 21.11.2007 the account was brought to credit balance by depositing cheques.
He has further deposed in the evidence in para 4 at page 7 that on 06.12.2007 by passing 2 cheques bearing Nos.249490 for Rs.75,000/- in favour of Meridian and cheque No.222735 for Rs.11,498/- in favour of Ajith 202 Spl.C.C.No.5/2010 Denial, the account was brought to debit balance of Rs.87,362/- on 06.12.2007. The said TOD was regularized on 14.12.2007 by transferring the amount from CCM account No........96 for Rs.90,000/-.
PW.20 - Smt. Jayashree has deposed in the evidence that accused No.1 had allowed the TOD in the current account of M/s. Stratycon Technologies Pvt. Ltd., for different amounts from 14.09.2007 to 16.11.2007.
PW.32 - B. Balakrishna Shetty, the then Assistant General Manager of Vijaya Bank has deposed in the evidence in para 4 at page 2-3 regarding guidelines of TOD in current account. He has referred Ex.P88 Booklet on Delegation of Powers. He has deposed that the temporary overdrawing in current account should be allowed only in sparing cases to meet the emergent need based requirement of the party, and it should be allowed maximum period of 15 days and should not made as a regular habit and the companies requirement to be assessed separately and need based limit to be fixed.
It is clear from the above evidence and documents that allowing of TOD to the customers in the current 203 Spl.C.C.No.5/2010 account is discretionary power of the branch head/branch manager and also the time within which it has to be repaid. The current account was opened in the name of M/s. Stratycon Technologies Pvt. Ltd, in Vijaya Bank, Koramangala Branch, Bengaluru on 08.08.2007. Accused No.1 has provided over drawing facility to the company on 14.08.2007 i.e., within seven days from the date of opening of the current account. Overdrawing facility should not be allowed to new party, but it can be allowed against the Government cheques or cheques of good company in favour of the said company. The branch head/branch manager should have to see that whether the current account maintained by the customer with the branch is satisfactory with average balance or having deposit relations by way of S.B. or term deposits, then the delegates may allow or permit temporary overdrafts in current accounts keeping in mind the average balances maintained on all deposit accounts for the past six (6) months, the Chief Manager can sanction Rs.10 lakhs and this amount should be regularized within a maximum period of 15 days. But in this case, accused 204 Spl.C.C.No.5/2010 No.1 has not at all considered all these facts and not followed the procedure prescribed for TOD. He has allowed the M/s. Stratycon Technologies Pvt. Ltd., company to overdraw the amount of Rs.10,07,645/- within one week from the date of opening of the current account in the bank. The Branch Manager/Branch Head can allow overdrawing facility to its customers only in sparing cases to meet the emergent need based requirement of the party and it should be allowed for maximum period of 15 days and should not made as a regular habit and the companies requirement to be assessed separately and need based limit to be fixed. But in this case, accused No.1 being the branch head has continuously allowed overdrawing facility to the said company in violation of the procedure prescribed for TOD facilities. Apart that he has not reported the said overdrawing facility granted by him to the said company to the regional office. It is clear that accused No.1 has violated the procedures prescribed in respect of TOD facility to his customers and has provided OD facility in violation of the procedures. It appears that accused No.1 205 Spl.C.C.No.5/2010 had colluded with accused Nos.2 and 3, who are the directors of the said M/s. Stratycon Technologies Pvt. Ltd., company and helped them to avail financial facility to the said company. He allowed the TOD facility to the said company. These are all clearly shows that accused Nos.1, 2 and 3 colluded and criminally conspired together and fraudulently and dishonestly cheated the bank. Accused No.1 has abused his power in granting TOD facility to the said M/s. Stratycon Technologies Pvt. Ltd. Accused Nos.1, 2 and 3 have committed the offences punishable under Sections 120-B and 420 of IPC, and accused No.1 has committed the offence punishable under Section 409 of IPC relating to this Temporary over Draft facility.
49. It is further case of the prosecution that there is an outstanding amount of Rs.4,41,97,083/- from the four accounts as on 28.12.2008 to the Vijaya Bank, Koramangala Branch, Bengaluru.
There is an outstanding amount of Rs.87,051/- in the Current Account No.13940030100030 and this fact is evident from Ex.P3-statement of account extract relating 206 Spl.C.C.No.5/2010 to the said account. Accused No.1 had allowed TOD in this account to the M/s. Stratycon Technologies Pvt. Ltd. Ex.P3 shows that the said company is in due of Rs.87.051/- as on 28.12.2008.
Ex.P24 is the statement of account extract relating to a Secured Loan A/c No.139409041000069, which is pertaining to Rs.30 lakhs. The said statement of account shows that the said company is in due of Rs.27,13,991/- as on 28.12.2008. Ex.P4 is the statement of account extract belongs to Cash Credit (Misc.) A/c No.139406011000096. It shows that the said company is in due of Rs.3,48,71,708/- as on 30.10.2008. Ex.P32 is the statement of account extract relating to Secured Loan A/c 139409041000073 pertaining to the secured loan of Rs.60 lakhs. It is evident from this document that the said company is in due of Rs.65,24,333/- as on 28.12.2008. It is clear that the said company is in total due of Rs.4,41,97,083/- to Vijaya Bank, Koramangala Branch, Bengaluru at the end of December 2008. 207 Spl.C.C.No.5/2010
50. The prosecution has contended that the accused persons have committed illegal acts in the loan transactions of the M/s. Stratycon Technologies Pvt. Ltd., and they caused loss of Rs.4,41,97,083/- to Vijaya Bank.
It is an admitted fact by the accused persons that the bank has filed civil suit against the said company and the said suit was decreed. The bank may recover the amount whatever available from the said company. It is well settled law that the result of civil suit is no way concern to the criminal case initiated against the accused persons.
51. I have already discussed in detail regarding all kinds of credit facilities given to the M/s. Stratycon Technologies Pvt. Ltd., company i.e., secured loan of Rs.30 lakhs, CCM limit loan of Rs.60 lakhs, and later extended upto Rs.1.50 crores, secured loan of Rs.60 lakhs, and TOD facilities provided to the said company by the bank. I have clearly discussed in detail about how the accused persons colluded, and committed criminal conspiracy, and cheated the bank and grabbed the money from the bank fraudulently and dishonestly. I 208 Spl.C.C.No.5/2010 have also stated about the offences committed by each accused in respect of the above said loan transactions. There is active collusion of accused Nos.1 to 5 in cheating the bank and with fraudulent and dishonest intention got disbursed the loan amount from the bank without sanction order as already stated. They have committed the alleged offences. The prosecution has proved beyond all reasonable doubts that accused Nos.1 to 5 have committed the alleged offences. Hence, I answer point No.2 in the affirmative against accused Nos.1, 2, 3, 4 and 5, Point No.3 in the affirmative against accused Nos.1, 2, 3, 4, and 5, point No.4 in the affirmative against accused Nos.1, 2, 3 and 4, point No.5 in the affirmative against accused Nos.1, 2, 3 and 4 and point No.6 in the affirmative against accused No.1
52. POINT NO.7 :- The case of the prosecution is that accused No.1 - Radhakrishna Shetty being the Branch Head of Vijaya Bank, Koramangala Branch, Bengaluru, had dominion over the money of the Bank and was to lend the said money in accordance with the procedure prescribed for the same. However, he had 209 Spl.C.C.No.5/2010 entered into a criminal conspiracy with accused Nos.2 to 5 in the mater of sanction and disbursal of the above said loan facilities in the name of M/s. Stratycon Technologies Pvt. Ltd., and in furtherance of the said conspiracy, various credit facilities were extended in favour of the company on the basis of forged and fabricated documents in gross violation of procedures prescribed for the same, thereby committed criminal breach of trust and criminal misconduct and thereby caused loss of Rs.4,41,97,083/- to the Vijaya Bank, Koramangala Branch, Bengaluru, and corresponding gain for themselves.
53. Accused No.1 being the branch head of the said bank had provided the loan facilities to the said company i.e., secured loan of Rs.30 lakhs on 11.09.2007, CCM Limit loan of Rs.60 lakhs on 30.10.2007 and additional CCM limit of Rs.40 lakhs on 11.03.2008 and further additional CCM limit of Rs.60 lakhs on 13.03.2008 (total CCM loan of Rs.1.50 crores), and provided secured loan of Rs.60 lakhs on 07.02.2008, and also provided TOD facilities to the said M/s. 210 Spl.C.C.No.5/2010 Stratycon Technologies Pvt. Ltd. I have already discussed in detail about sanctioning and disbursing of the said three loan facilities and TOD facility to the said company, and also discussed in detail and stated that how the false documents were created in respect of the said loans and what are all the roles played by accused Nos.1, 2, 3, 4 and 5 in got disbursing the said loan amount. I have also discussed regarding the properties offered as collateral securities to the said loans, and the collateral securities offered are inadequate to cover the risk of the above said loan amounts. I have also stated about creation and non-creation of equitable mortgage over the said properties in favour of the bank by accused No.1, and non-creation of charge on the fixed assets of the company in the records of the Registrar of Companies. Accused No.1 had abused his discretionary power in providing TOD facilities to the said company and he had acted beyond his limits and granted TOD facilities to the said company in violation of the procedures prescribed for providing TOD facilities to the customers. The accused persons have committed illegal acts in 211 Spl.C.C.No.5/2010 sanction and disbursal of the said loans, and in granting TOD facilities, and they caused loss of Rs.4,41,97,083/- to the bank. The accused No.1 being a public servant abused his position and powers in sanction and disbursing of various loans and providing TOD facilities to the said company and thereby obtained pecuniary advantage for himself or for any other persons. It is clear that he has committed criminal misconduct in respect of these loan transactions and TOD facilities to the M/s. Stratycon Technologies Pvt. Ltd. The prosecution has proved beyond all reasonable doubts that the accused No.1 has committed the offence punishable under Sections 13 (2) read with 13(1)(d) of Prevention of Corruption Act. Hence, I answer the Point No.7 in the Affirmative.
54. POINT NO.8:- In view of my findings on point Nos.1 to 7, I proceed to pass the following:
ORDER Acting under Section 235(2) of Cr.P.C. accused Nos.1 to 5 are convicted for the offences stated below :-212 Spl.C.C.No.5/2010
Accused No.1 is convicted for the offences punishable under Sections 120-B, 409, 420, 468, 471 of IPC and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988.
Accused No.2 is convicted for the offences punishable under Sections 120-B, 420, 468 and 471 of IPC.
Accused No.3 is convicted for the offences punishable under Sections 120-B, 420, 468 and 471 of IPC.
Accused No.4 is convicted for the offences punishable under Sections 120-B, 420, 468, 471 of IPC.
Accused No.5 is convicted for the offences punishable under Sections 120-B, and 420 of IPC.
The bail bonds executed by accused Nos.1 to 5 and their sureties are stands cancelled. Sentence shall follow after hearing accused persons regarding the quantum of sentence. (Dictated to the Judgment writer, transcribed by him, corrected and then pronounced by me in the open court, on this the 05th day of November, 2015).
(SHIVANNA), XLVIII Addl. City Civil & Sessions Judge, (Special Court for trial of CBI Cases), Bengaluru (CCH-49).
213 Spl.C.C.No.5/2010REGARDING SENTENCE Accused Nos.1, 2, 3, 4 and 5 are present. Their counsels are present. Public Prosecutor is present.
Heard regarding sentence on both sides. Accused No.1 - Radhakrishna Shetty has submitted that he is aged person. He is dismissed from the service in the bank. His son is residing at abroad, and his daughter is married and residing in the house of her husband. He and his wife are living together. He is only earning member in the family. Hence, prays for award lesser punishment.
Counsel for accused No.1 prays for award minimum sentence considering the submission of accused No.1.
Accused No.2 - Mithun Narayan has submitted that now he is aged about 34 years. He is having a son aged about 4 years. He is having unmarried sister. He is in financial distress. Hence, prays to take a lenient view.
Accused No.3 - Ramaiah Setty has submitted that he is aged about 67 years. He is suffering from diabetes, heart problem and other health problems. He is unable to stand for a long time. His wife is also patient and 214 Spl.C.C.No.5/2010 suffering from health problem. Hence, prays to take a lenient view.
Accused No.4 - Vinay K.R. has submitted that he is unmarried, and aged about 34 years. His parents are not well and suffering from some diseases i.e., B.P., Sugar and his father is suffering from heart problem. He has to look after his parents. Hence, prays to take lenient view.
Accused No.5 - Smt. Greeshma has submitted that she is aged about 36 years. She is widow. She is having a minor child. She is having heart problem. Her parents are aged persons. Hence, prays to take a lenient view.
Counsel for accused Nos.2 to 5 prays to take a lenient view considering the submission of accused Nos.2, 3, 4 and 5.
Public Prosecutor has submitted that accused Nos.1 to 5 have cheated the bank (Vijaya Bank, Koramangala Branch, Bengaluru). They caused loss to the bank. He prays not to take lenient view against the accused Nos.1 to 5.
215 Spl.C.C.No.5/2010
While imposing sentence the Court has to consider the nature of offences, and facts and circumstances of the case. The offences are 120-B, 409, 420, 468, and 471 of IPC and Section 13(2) r/w 13(1) (d) of P.C. Act, 1988. False documents (invoice/quotations and receipts) were created by accused Nos.3 and 4, and accused Nos.2 and 3 being the directors of M/s. Stratycon Technologies Pvt. Ltd., company had produced the same to the bank as genuine documents and induced accused No.1-branch head to disburse the loan and to grant other credit facilities stated in the charge-sheet to the said company. Accused No.1 has acted on the said documents without ascertaining the genuineness of the said documents. He (accused No.1) had altered/overwritten in some documents without authentication of concerned persons (accused Nos.2 and 3). Considering these facts, I hold that it is not a fit case to take lenient view regarding sentence. Accused Nos.1 and 2 have submitted that they are suffering from health problems, and they are aged persons, and accused No.3 is having a child, aged about 4 years. Accused No.4 is unmarried (he is the son 216 Spl.C.C.No.5/2010 of accused No.3) and he has to look after his parents. These are all not the grounds to take a lenient view considering the nature of the offences and facts and circumstances of this case.
Accused No.5 is a widow. She had not created any false documents and not issued any false documents to the said Bank. However, she is involved in the alleged offences. Considering these facts, I feel that suspendable sentence can be imposed against her.
Considering all these facts, I pass the following:-
ORDER (1). Accused No.1 is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 120-B of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
He is sentenced to undergo RI for a period of 5 years and to pay fine of Rs.2,00,000/- for the offence punishable under Section 409 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
217 Spl.C.C.No.5/2010He is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 420 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
He is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 468 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
He is sentenced to undergo RI for a period of 2 years and to pay fine of Rs.50,000/- for the offence punishable under Section 471 of IPC, and in default of payment of fine he shall undergo SI for a period of six months.
He is sentenced to undergo RI for a period of 2 years and to pay fine of Rs.50,000/- for the offence punishable under Section 13(2) r/w 13(1) (d) of P.C. Act, and in default of payment of fine he shall undergo SI for a period of six months.
(2). Accused No.2 - Mithun Narayan is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 120-B of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
218 Spl.C.C.No.5/2010He is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 420 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
He is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 468 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
He is sentenced to undergo RI for a period of 2 years and to pay fine of Rs.50,000/- for the offence punishable under Section 471 of IPC, and in default of payment of fine he shall undergo SI for a period of six months.
(3). Accused No.3 - Ramaiah Setty is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 120-B of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
He is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 420 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
219 Spl.C.C.No.5/2010He is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 468 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
He is sentenced to undergo RI for a period of 2 years and to pay fine of Rs.50,000/- for the offence punishable under Section 471 of IPC, and in default of payment of fine he shall undergo SI for a period of six months.
(4). Accused No.4 - Vinay K.R., is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 120-B of IPC, and in default of payment of fine he shall undergo SI for a period of one year. He is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 420 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
He is sentenced to undergo RI for a period of 4 years and to pay fine of Rs.1,00,000/- for the offence punishable under Section 468 of IPC, and in default of payment of fine he shall undergo SI for a period of one year.
220 Spl.C.C.No.5/2010
He is sentenced to undergo RI for a period of 2 years and to pay fine of Rs.50,000/- for the offence punishable under Section 471 of IPC, and in default of payment of fine he shall undergo SI for a period of six months.
(5). Accused No.5 - Smt. Greeshma is sentenced to undergo RI for a period of 3 years and to pay fine of Rs.50,000/- for the offence punishable under Section 120-B of IPC, and in default of payment of fine she shall undergo SI for a period of six months.
She is sentenced to undergo RI for a period of 3 years and to pay fine of Rs.50,000/- for the offence punishable under Section 420 of IPC, and in default of payment of fine she shall undergo SI for a period of six months.
All substantive sentences shall run concurrently.
The period of detention if any, undergone by accused Nos.1, 2, 3, 4 and 5 in Judicial Custody during the pendency of this case is given set off under section 428 Cr.P.C.
Office to furnish free copies of Judgment to accused Nos.1 to 5.
221 Spl.C.C.No.5/2010
Office to issue conviction warrant against accused Nos.1 to 5.
Send the copy of this judgment to the District Magistrate in compliance to Section 365 of Cr.P.C. (Dictated to the Judgment writer, transcribed by him, corrected and then pronounced by me in the open court, on this the 05th day of November, 2015).
(SHIVANNA) XLVIII Addl. City Civil & Sessions Judge (Special Court for trial of CBI Cases) Bengaluru (CCH-49).
ANNEXURE Witnesses examined on behalf of the prosecution:
PW.1 K. Shantharama Kamath
PW.2 C. Jayakumar
PW.3 B. Gurudath Shenoy
PW.4 A. Gopal
PW.5 A Sekhar Ponnuraj
PW.6 S. Ananthaswamy
PW.7 Jagadeesh Shetty
PW.8 Ramakrishna Reddy
PW.9 D.C. Krishnappa
PW.10 G. Raju
PW.11 Fazal Ahammad
PW.12 Nagabushan
PW.13 C.A. R. Badarinath
PW.14 A.P. Pundalika Rao
PW.15 Ganapathi Sorotur
PW.16 Prabhat Kumar Shukla
PW.17 Chandrashekar K
PW.18 B. Jayananda Shetty
PW.19 Shashikiran K
222 Spl.C.C.No.5/2010
PW.20 Smt Jayashree
PW.21 Laxman B. Bajantri
PW.22 A.M. Krishnamurthy
PW.23 P. Chandrashekar
PW.24 Raghunath
PW.25 Smt. Pramoda Shetty
PW.26 Rajaram Khandige
PW.27 K. Udaykumar Shetty
PW.28 Sunderaraman V.S.
PW.29 S. Sudhakar Shettigar
PW.30 Rangaswamy K
PW.31 B. Rajagopal Rai
PW.32 B. Balakrishna Shetty
PW.33 Ranavijeta
PW.34 Nuthan Shetty
PW.35 K. Jayakarashetty
PW.36 Sudeep Agrahara
PW.37 Yerrappa
PW.38 Y. Suryaprasad
PW.39 H.M. Venkatesh
PW.40 Ms. Vidhya Lakshmi
PW.41 Jaboy K.R.
PW.42 K.V. Chandrashekar
Documents marked on behalf of the prosecution:
Ex.P1 Certified copy of Investigation Report (in respect of irregularities in loans and advances) dated 14.11.2008 of Vijaya Bank Central inspection (38 sheets) Ex.P1(a) Covering letter dt:13.02.2009 Ex.P2 Copy of Complaint Ex.P2(a) Signature of PW.1 Ex.P2(b) Original Complaint Ex.P3 Statement of Accounts Extract (23 sheets) Ex.P3(a) Relevant entry at Sheet No.8 Ex.P3(b) Relevant entry at Sheet No.8 Ex.P3(c) Relevant entry at Sheet No.15 Ex.P3(d) Relevant entry at Sheet No.15 223 Spl.C.C.No.5/2010 Ex.P3(e) Relevant entry at Sheet No.16 Ex.P3(f) Relevant entry at Sheet No.19 Ex.P3(g) Relevant entry at Sheet No.19 Ex.P3(h) Relevant entry at Sheet No.7 Ex.P3(i) Relevant entry at sheet No.1 Ex.P3(j) Relevant entry at sheet No.3 Ex.P3(k) Relevant entry at sheet No.1 Ex.P4 Statement of Accounts Extract (31 sheets) Ex.P4(a) Relevant Entry in Page No.1 Ex.P4(b) Relevant Entry in Page No.1 Ex.P4(c) Relevant Entry in Page No.7 Ex.P4(d),(e) & (f) Relevant Entry in Page No.8 Ex.P4(g), (g1) Relevant Entry in Page No.9 Ex.P4(h) Relevant Entry in Page No.10 Ex.P4(i) (i1, i2 & (j) Relevant Entry in Page No.23 Ex.P4(k) (k1 to k3) Relevant Entry in Page No.24 Ex.P4(l) Relevant Entry in Page No.31 Ex.P4(m) Relevant Entry in Page No.29 to 31 Ex.P4(n) Relevant Entry in Page No.6 Ex.P4(o) Relevant Entry in Page No.14 to 20 Ex.P4 (p) & (P1) Relevant entry at Page No.16 Ex.P4(q), (q1 & 2) Relevant entry at Page No.17 Ex.P4(r) Relevant entry at Page No.21 Ex.P4(s) (s1 to s4) Relevant entry at Page No.22 Ex.P4(t) to (t2) Relevant entry at Page No.25 Ex.P4(u),(u1 & u2) Relevant entry at Page No.26 Ex.P4(v) to (v1) Relevant entry at Page No.27 Ex.P4(w) to (w4) Relevant entry at Page No.28 Ex.P5 Pro-note dt:30.10.2007 Ex.P5(a) & (b) Relevant Entry (over writings) Ex.P6 Letter of Repayment Ex.P6(a) & (b) Over writings Ex.P7 Overdraft Agreement Ex.P7(a) & (b) Over writings Ex.P8 Sanction letter Ex.P8(a) Over writings Ex.P8(b) Signature of accused No.1 Ex.P8(c) Signature of accused No.2 224 Spl.C.C.No.5/2010 Ex.P8(d) Signature of accused No.3 Ex.P9 Letter of Guarantee Ex.P9(a) Over writings Ex.P10 Letter of Guarantee Ex.P10(a) Over writings Ex.P11 Cheque for Rs.9,000,00/-
Ex.P12 Cheque for Rs.40,000,00/-
Ex.P13 Cheque for Rs.20,000,00/-
Ex.P14 Cheque for Rs.34,000,00/-
Ex.P15 Cheque for Rs.60,070,20/-
Ex.P16 DD Application form for Ex.P15
Ex.P17 Office copy of the DD for Ex.P15
Ex.P18 Cheque for Rs.15,000,00/-
Ex.P19 Cheque for Rs.16,80,200/-
Ex.P20 Cheques referred register of
Vijaya Bank
Ex.P20(a) Relevant Entry at page No.61
Ex.P20(b)&(b1) Relevant Entry at page No.64
Ex.P20(c) Relevant Entry at page No.100
Ex.P20(d),(d1, d2) Relevant Entry at page No.53
Ex.P20(e) & (e1) Relevant Entry at page No.54
Ex.P20(f, f1 to f4) Relevant Entry at page No.55
Ex.P20(g, g1 to g4) Relevant Entry at page No.56
Ex.P20(h, h1 to h3) Relevant Entry at page No.57
Ex.P20(i), (i1) &(i2) Relevant Entry at page No.58 Ex.P20(j) Relevant Entry at page No.59 Ex.P20(k),(k1 tok3) Relevant Entry at page No.60 Ex.P20(l), (l1 to l6) Relevant Entry at page No.61 Ex.P20(m), (m1) Relevant Entry at page No.63 Ex.P20(n) Relevant Entry at page No.32 Ex.P20(o), (o1) Relevant Entry at page No.33 Ex.P20(p, p1 to p4) Relevant Entry at page No.34 Ex.P20(q, q1 to q5) Relevant Entry at page No.35 Ex.P20(r, r1 to r3) Relevant Entry at page No.36 Ex.P20(s) & (s1) Relevant Entry at page No.37 Ex.P20(t) to (t7) Relevant Entry at page No.38 Ex.P20(u) to (u6) Relevant Entry at page No.39 Ex.P20(v) to (v3) Relevant Entry at page No.40 Ex.P20(w) to (w3) Relevant Entry at page No.41 Ex.P20(x) Relevant Entry at page No.42 Ex.P21 Cheque for Rs.4,000,00/-225 Spl.C.C.No.5/2010
Ex.P22 Sanction letter
Ex.P22(a) Signature of accused No.1
Ex.P23 Letter of repayment (6 sheets)
Ex.P24 Statement of Accounts (3 sheets)
Ex.P25 Hypothecation Agreement
Ex.P26 Articles of Agreement
Ex.P27 Letter of Repayment
Ex.P28 Letter of Guarantee
Ex.P29 Quotation of S.L.V. Solutions
Ex.P30 Quotation of TMT Constructions
Ex.P31 Unstamped receipt of SLV
Solutions
Ex.P32 Statement of Account Extract
Ex.P33 Status Report
Ex.P33(a) Signature of accused No.1
Ex.P34 Office note of Vijaya Bank
Ex.P34(a) Signature of accused No.1
Ex.P34(b) Writings & Signature of accused
No.1
Ex.P35 Office Note of Vijaya Bank
Ex.P35(a) Signature of accused No.1
Ex.P35(b) Writings & Signature of accused
No.1
Ex.P36 to 39 RTGS request forms
Ex.P40 Pro-note dated 30.10.2007
Ex.P41 Letter of Repayment
dt:30.10.2007
Ex.P42 Overdraft Agreement dated
30.10.2007
Ex.P43 Loan sanction memo (intimation
letter) demand promissory note
and memorandum of agreement.
Ex.P44 Copy of Resolution dt:07.08.2008
Ex.P45 Articles of Agreement
Ex.P46 Current A/c opening Form of
Vijaya Bank
Ex.P46(a) Resolution letter dt:06.08.2007
Ex.P46(b) Specimen Signatures letter (M.S.
Narayana and Ramaiah Setty)
Ex.P46(c) Two Specimen Signature Cards
Ex.P46(d) Signature of PW.8
226 Spl.C.C.No.5/2010
Ex.P46(e) Signature of accused No.1
Ex.P46(f) Signature of PW.26
Ex.P46(g) Signature of PW.41
Ex.P47 Carbon Copy of sanction
proceedings register (control
return form) (total 15 sheets)
Ex.P47(a) Relevant Entry
Ex.P48 Carbon copy of credit limit
sanction proceedings -cum-
reporting register (control return
forms) (total 9 sheets).
Ex.P48(a) Relevant entry
Ex.P49 Current A/c opening form of State
Bank of India
Ex.P49(a) Signature of Vidya Lakshmi
Ex.P49(b) Signature of PW.4
Ex.P49(c) Signature of PW.40 - Ms. Vidya
Lakshmi
Ex.P50 Certified copy of registration
certificate of establishment
Ex.P51 Certified copy of rental agreement
dt: 24.12.2006
Ex.P52 Certified copy of Pan Card
Ex.P53 Cheque No.653909, dt:12.02.
2008 for Rs.4,91,500/-
Ex.P53(a & b) Signatures of PW.40
Ex.P54 Cheque No.653908 dt:09.02.2008
for Rs.30,00,000/-
Ex.P54(a & b) Signatures of PW.40
Ex.P55 ChequeNo.653907 dt:08.02.2008
for Rs.25,00,000/-
Ex.P55(a & b) Signatures of PW.40
Ex.P56 Statement of Accounts of A/c
No.30315364673 of State Bank of
India.
Ex.P.56(a) Relevant entry
Ex.P.57 Cheque No.270876 dt:29.01.2008
for Rs.8,000/-
Ex.P.57(a & b) Signatures of PW.40
Ex.P.58 Credit Voucher in A/c
No.30315364673 dt:23.01.2008
227 Spl.C.C.No.5/2010
for Rs.10,000/-
Ex.P.58(a) Signature of PW.40
Ex.P.59 Copy of Certificate of
incorporation dt.24.4.2008
Ex.P60 Certified copy of Form No.32
(9 sheets)
Ex.P60(a) Signature of PW.5 - A. Sekhar
Ponnuraj
Ex.P61 Letter dt:20.02.2009
Ex.P61(a) Signature of PW.5
Ex.P62 Letter dt:09.04.2009
Ex.P62(a) Signature of PW.5
Ex.P63 Letter dt:30.01.2009
Ex.P63(a) Signature of V.C.Davey
Ex.P64 Transfer and posting order of
accused No.1 dt:24.01.2007
Ex.P64(a) Signature of PW.6
Ex.P65 Transfer and posting order of
accused No.1 dt:31.07.2008
Ex.P66 Relieving order of accused No.1
dt:23.08.2008
Ex.P67 Joining report of accused No.1
dt:04.02.2007
Ex.P67(a) Signature of Accused No.1
Ex.P68 Application for term loan dated
13.08.2007 (24 sheets)
Ex.P69 Reply letter of HSBC Bank
Ex.P70 Hypothecation agreement
dt:30.10.2007
Ex.P71 Original acknowledgment of
liability dt: 20.08.2008
Ex.P72 Valuation report dt:26.10.2007
Ex.P72(a & b) Signatures of PW.27 K. Udaya Kumar Shetty Ex.P72(c) Signature of PW.27 in location map Ex.P73 Inspection report for landed property dt:25.10.2007 Ex.P73(a) Signature of PW.7 - Jagadeesh Shetty Ex.P74 Valuation report dt:16.11.2007 228 Spl.C.C.No.5/2010 Ex.P74(a, b & c) Signature of PW.27 Ex.P75 Inspection report for landed property dt:16.11.2007 Ex.P75(a) Signature of PW.7 Ex.P76 Letter from accused No.1 to Chief Manager, Vijaya Bank Ex.P76(a) Signature of accused No.1 Ex.P77 Letter by accused No.1 to Chief Manager dt:21.10.2008 Ex.P77(a) Signature of accused No.1 Ex.P78 Certificate of loan papers dt:19.08.2008 Ex.P78(a) Signature of accused No.1 Ex.P79 Loan process note dt:10.08.2008 Ex.P79(a) Signature of accused No.1 Ex.P80 Cheque No.911378 for Rs.8,00,000/- dt:22.01.2008 Ex.P80(a) Signature of PW.8 - Ramakrishna Reddy Ex.P81 Cheque No.911380 for Rs.165000/- dt:09.02.2008 Ex.P81(a) Signature of PW.8 Ex.P81(b) Signature of accused No.1 Ex.P82 Copy of Manual of advances- 2003 Chapter No.3 (Volume-1) Ex.P83 Certificate issued by AGM (credit operations, Vijaya Bank) dated 20.03.2009 Ex.P84 Certified copy of manual of advances (Volume 1) 2002-03 Ex.P85 Certified copy of Vijaya Bank manual of instructions -
December 2008 Ex.P86 Certified copy of office notification No.6/04 dt:19.02.2004 Ex.P87 Certified copy of Vijaya Bank manual of advances Volume-III (2003) Ex.P88 Certified copy of Booklet on delegation of power (Circular) Vijaya Bank 229 Spl.C.C.No.5/2010 Ex.P88(a) Relevant entries at Page Nos.30 & 31 Ex.P89 Credit appraisal note dt:11.09.2007 Ex.P89(a) Portion in Ex.P89 Ex.P89(b) Signature of PW.20 - Smt. Jayashree Ex.P89(c) Signature of accused No.1 Ex.P90 Title deeds register No.3 (From 1 to 198) of Vijaya Bank Ex.P91 Quarterly credit monitoring report of Vijaya Bank Ex.P91(a) & (b) Signature of accused No.1 Ex.P92 M/s SLV Solutions Invoice dt:04.09.2007 Ex.P93 M/s SLV Solutions Receipt No.A-
2166 for Rs.2,43,984/-
dt:14.09.2007
Ex.P.93(a) Quotation for IBM Server issued
by S.L.V. Solutions
Ex.P.93(b) Quotation for IBM Server issued
by S.L.V. Solutions
Ex.P94 M/s Vignesh Techno services
Invoice dt:03.09.2007.
Ex.P95 Receipt of M/s Vignesh Techno
Services dt:15.09.2007 for
Rs.17,94,000/-
Ex.P96 M/s Impact Securitas Receipt
No.56945 dt:16.10.2007
Ex.P97 Carbon Copy of Credit limit
sanction (MR25A) for September
2007
Ex.P98 Carbon copy of credit limit
sanction (MR 25A) for October
2007
Ex.P99 Carbon copy of Credit limit
sanction (MR 25A) for February
2008
Ex.P99(a) Relevant entry
Ex.P100 Vijaya Bank status report for all
borrower accounts with aggregate
230 Spl.C.C.No.5/2010
limits outstanding of Rs.1 Crore
and above (3 sheets)
Ex.P100(a & b) Relevant entries
Ex.P101 Copy of Letter dt:15.11.2007
Ex.P102 A/c opening form of Corporation
Bank (A/c. No.CBCA - 148)
dt:01.09.2007
Ex.P102 (a & b) Signatures of accused No.3 -
Ramaiah Setty
Ex.P102(c) Proprietorship letter
dt:01.09.2007
Ex.P102(c1) Signature of accused No.3
Ex.P102(d) Registration Certificate of
Establishment (Xerox copy)
Ex.P102(d1) Signature of accused No.3
Ex.P103 CC of statement of accounts in
A/C.No.CBCA-148
Ex.P104 Pay-in-slip dt:19.03.2008
Ex.P104(a) Pay-in-slip dt:23.04.2008
Ex.P104(b) Pay-in-slip dt:30.06.2008
Ex.P105 Self cheque No-247582 dated
24.03.2008 (Ramaiah Setty)
Ex.P105(a) Self Cheque No-247584 dated
26.03.2008 (Ramaiah Setty)
Ex.P106 Cheque No 247583 dated
25.03.2008
Ex.P.106(a) Cheque No 247585 dated
29.03.2008
Ex.P.107 Cheque No 247593 dated
25.04.2008
Ex.P.107(a) Corporation Bank Challan dated
25.04.2008
Ex.P.108 Account opening form of A/C No-
CBCA-172 dated 14.11.2007
Ex.P108(a) Signature of accused No.4 - Vinay
K.R.
Ex.P108(b) Signature of bank manager
(PW.10)
Ex.P108(c) Proprietorship letter dated
14.11.2007.
Ex.P109 Current account statement of A/C
231 Spl.C.C.No.5/2010
No. CBCA 172 (2 sheets)
Ex.P110 Pay-in-slip dt:15.11.2007
Ex.P111 Cheque dt:20.11.2007
Ex.P111(a) Cheque dt:20.11.2007
Ex.P111(b) RTGS Challan dated 20.11.2007
Ex.P111(c) RTGS Challan dated 20.11.2007
Ex.P112 Covering Letter dt:05.04.2009
Ex.P112(a) Signature of PW.10 -G. Raju
Ex.P113 17 cheques in the name of PW.11
Ex.P114 Account opening form of M/s
Impact Securitas
Ex.P114(a) Signature of PW.12 -
Nagabhushan
Ex.P114(b) Application to open A/c and
cheque book
Ex.P115 Accounts extract of Impact
Securitas of A/c No.30014813510
Ex.P115(a & b) Relevant entries
Ex.P116 Accounts extract of Impact
Securities of A/c No.30014813510
Ex.P116(a) Relevant entries
Ex.P117 Credit voucher dt :13.08.2007 for
Rs.14,80,000/- (pay-in-slip)
Ex.P118 Cheque No.158172 dt:14.08.2007
for Rs.14,75,000/-
Ex.P118(a) Signature of PW.12
Ex.P119 Credit Voucher dt:17.10.2007 for
Rs.9,62,016/- (pay-in-slip)
Ex.P120 Cheque No.981842 dt:17.10.2007
Ex.P120(a) Signature of PW.12
Ex.P121 Cheque No.981843 dt:17.10.2007
Ex.P121(a) Signature of PW.12
Ex.P122 Auditors report to the members of
the company (5 sheets)
Ex.P122(a) Signature of PW.13 - C.A. R.
Badrinath
Ex.P122(b) Computation of total income
sheets (3 sheets)
Ex.P122(c) Balance Sheet as on 31st March
2007 of Stratycon Technologies
Pvt. Ltd.,
232 Spl.C.C.No.5/2010
Ex.P122(c1 to c3) Relevant entries
Ex.P122(d) Receipt Memo dt:07.05.2009
Ex.P122(d1) Signature of PW.13 - C.A. R.
Badrinath
Ex.P123 Covering letter dt:07.05.2009
Ex.P123(a) Signature of PW.14 - A.P.
Pundalika Rao
Ex.P123(b) CC of Form No.A
Ex.P123(c) CC of receipt counterfoil
Ex.P123(d) CC of 'B' register extract
Ex.P124 Receipt Memo dt:18.05.2009
Ex.P.124(a) Signature of Assistant Manager
(PW.15 Ganapathi Sorotur)
Ex.P125 Account opening form
dt.24.8.2007 with enclosures (10
sheets) of Bank of Baroda
Ex.P125(a) Letter of Sole Proprietorship
Ex.P125(b) Copy of registration certificate
issued by Labour Department
(Form No.C)
Ex.P125(c) Copy of Pan Card of accused No.4
Vinay K.R.
Ex.P125(d) Copy of ration card of accused
No.4
Ex.P125(e) Letter of undertaking
dt.24.8.2007
Ex.P126 Account statement of A/c
No.29600200000144 of Vignesh
Techno Services (4 sheets
including certificate)
Ex.P127 Credit voucher dt:28.08.2007 for
Rs.6,000,00/-
Ex.P128 Credit Voucher dt:27.08.2007 for
Rs.4,00,000/-
Ex.P129 Credit Voucher dt:11.09.2007 for
Rs.17,94,000/-
Ex.P130 Credit Voucher dt:03.10.2007 for
Rs.4,00,000/-
Ex.P131 Credit Voucher dt:17.10.2007 for
Rs.3,50,000/-
Ex.P132 Credit Voucher dt:28.11.2007 for
233 Spl.C.C.No.5/2010
Rs.30,000/-
Ex.P133 Credit Voucher dt:08.02.2008 for Rs.9,50,000/-
Ex.P134 Credit Voucher dt:09.02.2008 for Rs.23,00,000/-
Ex.P135 Credit Voucher dt:12.02.2008 for Rs.3,00,000/-
Ex.P136 Credit Voucher dt:11.03.2008 for Rs.2,00,000/-
Ex.P137 Credit Voucher dt:11.12.2008 for Rs.3,500/-
Ex.P138 Credit Voucher dt:04.12.2008 for Rs.22,28,000/-
Ex.P139 Cheque No.235956 dt:19.10.2007 for Rs.3,50,000/-
Ex.P140 Cheque No.235954 dt:12.09.2007 for Rs.17,94,000/-
Ex.P141 Cheque No.235963 dt:09.02.2008 for Rs.5,60,000/-
Ex.P142 Cheque No.235965 dt:12.02.2008 for Rs.1,00,000/-
Ex.P143 Cheque No.235966 dt:13.02.2008 for Rs.9,50,000/-
Ex.P144 Cheque No.235985 dt:14.03.2008 for Rs.1,59,560/-
Ex.P145 Request letter dt.28.8.2007 to transfer amount through RTGS for Rs.4,00,000/-
Ex.P146 Request letter dt.27.8.2007 to transfer amount through RTGS for Rs.6,00,000/-
Ex.P147 Cheque No.235983 dt:20.02.2008 for Rs.3,13,000/-
Ex.P148 Cheque No.235957 dt:29.10.2007 for Rs.2,500/-
Ex.P149 Cheque No.235958 dt:30.10.2007 for Rs.1,700/-
Ex.P150 Cheque No.235961 dt:08.02.2008 for Rs.19,600/-
Ex.P151 Cheque No.235968 dt:13.02.2008 for Rs.6,942/-
234 Spl.C.C.No.5/2010Ex.P152 Cheque No.235970 dt:14.02.2008 for Rs.11,300/-
Ex.P153 Cheque No.235977 dt:14.02.2008 for Rs.15,580/-
Ex.P154 Cheque No.235978 dt:15.02.2008 for Rs.3,588/-
Ex.P155 Cheque No.235979 dt:15.02.2008 for Rs.2,568/-
Ex.P156 Cheque No.235981 dt:19.02.2008 for Rs.20,000/-
Ex.P157 Cheque No.235962 dt:08.02.2008 for Rs.2,30,000/-
Ex.P158 Cheque No.235964 dt:11.02.2008 for Rs.1,00,000/-
Ex.P159 Cheque No.235967 dt:13.02.2008 for Rs.2,30,000/-
Ex.P160 Cheque No.235972 dt:14.02.2008 for Rs.88,700/-
Ex.P161 Cheque No.235980 dt:18.02.2008 for Rs.2,50,000/-
Ex.P162 Cheque No.235953 dt:31.08.2007 for Rs.3,900/-
Ex.P163 Cheque No.235974 dt:14.02.2008 for Rs.37,756/-
Ex.P164 Cheque No.235984 dt:12.03.2008 for Rs.40,000/-
Ex.P165 Cheque No.235975 dt:15.02.2008 for Rs.2,25,000/-
Ex.P166 Cheque No.235976 dt:15.02.2008 for Rs.2,50,000/-
Ex.P167 Cheque No.235955 dt:03.10.2007 for Rs.3,95,000/-
Ex.P168 Cheque No.235959 dt:03.12.2007 for Rs.30,000/-
Ex.P169 Cheque No.235986 dt:05.12.2008 for Rs.7,00,000/-
Ex.P170 Cheque No.235988 dt:06.12.2008 for Rs.15,27,000/-
Ex.P171 Cheque No.235960 dt:08.02.2008 Rs.1,00,000/-
Ex.P172 Cheque No.235969 dt:13.02.2008 235 Spl.C.C.No.5/2010 for Rs.15,000/-
Ex.P173 Cheque No.235971 dt:14.02.2008 for Rs.15,770/-
Ex.P174 CC of A/c statement of account
No.29600200000121 of Stratycon
Technologies Pvt. Ltd., (65
sheets)
Ex.P174(a) Relevant entries of Ex.P139 page No.57 Ex.P174(b) Relevant entries of Ex.P140 page No.60 Ex.P174(c) Relevant entries of Ex.P141 page No.39 Ex.P174(d) Relevant entries of Ex.P142 page No.37 Ex.P174(e) Relevant entries of Ex.P143 page No.36 Ex.P174(f) Relevant entries of Ex.P144 page No.34 Ex.P175 DD No.455829 of Vijaya Bank dt:15.03.2008 for Rs.5 lakhs Ex.P176 DD No.456404 of Vijaya Bank dt:17.04.2008 for Rs.1 lakh Ex.P177 DD No.456735 of Vijaya Bank dt:16.05.2008 for Rs.1 lakh Ex.P178 DD No.457206 of Vijaya Bank dt:19.06.2008 for Rs.1 lakh Ex.P179 DD No.457647 of Vijaya Bank dt:19.07.2008 for Rs.1 lakh Ex.P180 DD No.388412 of Vijaya Bank dt:27.07.2008 for Rs.1 lakh Ex.P181 DD No.455967 of Vijaya Bank dt:26.03.2008 for Rs.60 lakhs Ex.P182 Receipt Memo dt:21.05.2009 Ex.P182(a) Signature of PW.18 - B. Jayananda Shetty Ex.P183 CC of Sale Deed dt:18.08.2003 (15 sheets) Ex.P184 Memorandum dt:12.12.2007 (16 sheets) 236 Spl.C.C.No.5/2010 Ex.P184(a) Signature of PW.19 - Shashi Kiran K Ex.P184(b) Signature of CW.19 - Veeresham Ex.P184(c) Relevant entry Ex.P185 Appraisal note in respect of CC limit of Rs.60 lakhs Ex.P185(a) Signature of PW.20 - Smt. Jayashree Ex.P185(b) Signature of accused No.1 Ex.P185(c) Signature of PW.7- Jagadeesh Shetty Ex.P186 Cheques (43) Ex.P186(a) Relevant entry Ex.P187 Cheques (3) Ex.P188 One Cheque Ex.P188(a & b) Requisition of DDs and Office copy of DD's Ex.P189 One cheque Ex.P189(a & b) Requisition of DDs and Office copy of DD's Ex.P190 One cheque Ex.P190(a & b) Requisition of DDs and Office copy of DD's Ex.P191 One cheque Ex.P191(a) Requisition of DDs and Office copy of DD's Ex.P192 One cheque Ex.P192(a & b) Requisition of DDs and Office copy of DD's Ex.P193 One cheque Ex.P193(a & b) Requisition of DDs and Office copy of DD's Ex.P194 One cheque of Rs.70,000/-
dat:22.10.2007
Ex.P195 One cheque of Rs.5,00,585/-
dt:26.03.2008
Ex.P196 One cheque of Rs.1,84,658/-
dt:15.07.2008
Ex.P197 Voucher and copy of DD dt:
11.09.2007
Ex.P198 Voucher and copy of DD
237 Spl.C.C.No.5/2010
dt:16.10.2007
Ex.P199 Voucher and copy of DD
dt:11.09.2007
Ex.P200 Credit voucher dt:28.06.2008 for
Rs.3,07,00,000/-
Ex.P201 Credit Voucher of
Rs.2,20,00,000/-
Ex.P201(a) Initial of accused No.1
Ex.P202 Account opening form of A/c No.
CBCA 01000087 Sughosh
Advertising (3 sheets)
Ex.P202(a) Proprietorship letter dt.
28.03.2008
Ex.P203 Extract of Statement of account
No. CBCA 01/000087 (10 sheets)
Ex.P203(a to e) Relevant entries in Ex.P203 Ex.P204 56 cheques of Corporation Bank issued by Proprietorix of Sughosh Advertising in favour of Ramaiah Setty Ex.P205 11 cheques of Corporation Bank issued by Sughosh Advertising in favour of Syed Ahmed Ex.P206 4 cheques of Corporation Bank issued by Sughosh Advertising (self cheques) Ex.P207 6 cheques of Corporation Bank issued by Sughosh Advertising in favour of Prakash Ex.P208 1 cheque of Corporation Bank issued by Sughosh Advertising in favour of Prakash Ex.P209 23 cheques of Corporation Bank issued by Sughosh Advertising Ex.P210 11 Credit Vouchers (credit slips) Ex.P211 Covering letter dt:06.06.2009 Ex.P211(a) Signature of PW.21- Laxman B. Bajantri Ex.P212 Receipt - Memo (3 sheets) dt:27.06.2009 Ex.P212(a to c) Signature of PW.21 - Laxman B. 238 Spl.C.C.No.5/2010 Bajantri Ex.P213 Covering letter dt:15.07.2009 Ex.P213(a) Signature of PW.22 - A.M. Krishna Murthy Ex.P213(b) Attested copy Application -Form-A Ex.P213(b1) Signature of PW.22 Ex.P213(c) Attested copy of 'B' Register Ex.P213(c1) Signature of PW.22 Ex.P214 Appraisal note (Process Note) dt.5.2.2008 Ex.P215 Diary Ex.P215(a) Signature of PW.24 - Raghunath Ex.P216 Panchanama dt:02.01.2009 Ex.P216(a) Signature of PW.24 Ex.P217 Covering letter dt:10.09.2009 of Oriental Bank of Commerce Ex.P217(a) Signature of PW.28 -
Sunderaraman V.S.
Ex.P218 Account opening form (Xerox
copy) of Oriental Bank of
Commerce
Ex.P218(a) Specimen Signature Card (Xerox)
Ex.P219 Certified copy of Statement of
CCA Account of Oriental Bank of
Commerce, Account
No.02074011000180
Ex.P220 Certified Copy of Statement of
account of M/s Stratycon
Technologies Pvt. Ltd., A/C
No.02077011000280
Ex.P221 Legal Scrutiny report dt.
23.10.2007
Ex.P221(a & b) Signature of PW.29- S. Sudhakar Shettigar Ex.P222 Legal Scrutiny report dt.
20.11.2007
Ex.P222(a & b) Signature of PW.29
Ex.P223 Legal Scrutiny Report dt
2.01.2008 (6 sheets)
Ex.P223(a) Signature of PW.29
Ex.P224 Certified copy of TOD Register (6
239 Spl.C.C.No.5/2010
sheets)
Ex.P224(a) Relevant entry
Ex.P224(b) Relevant entry
Ex.P224(c) Relevant entry
Ex.P225 Certified copy of computer screen
shot
Ex.P225(a to c) Relevant portion in Ex.P225
Ex.P226 Certified copy of computer screen
shot
Ex.P226 (a to c) Relevant portion in Ex.P226 Ex.P227 Certified copy of computer screen shot Ex.P227(a to c) Relevant portion in Ex.P227 Ex.P228 Certified copy of computer screen shot Ex.P228(a to c) Relevant portion in Ex.P228 Ex.P229 Certified copy of computer screen shot.
Ex.P229(a to c) Relevant portion in Ex.P229 Ex.P230 Certified copy of computer screen shot Ex.P230(a to c) Relevant portion in Ex.P230 Ex.P231 Covering Letter dated 17.8.2009 Ex.P231(a) Signature of PW.30 -
Rangaswamy K
Ex.P232 Certified Copy of form "A"
Ex.P233 Covering Letter dated 17.8.2009
Ex.P233(a) Signature of PW.30
Ex.P234 Certified copy of Form-A
Ex.P235 Covering letter dt.07.05.2009.
Ex.P235(a) Signature of PW.30
Ex.P236 Certified copy of Form-A
Ex.P237 Certified copy of 'B' register
extract
Ex.P238 Carbon copy of fraud committed
report submitted by PW.31- B.
Rajagopal Rai
Ex.P238(a) Signature of PW.31 - B. Rajagopal
Rai
Ex.P239 Letter dt:13.11.2008 (5 sheets)
Ex.P240 Letter dt:14.03.2009
240 Spl.C.C.No.5/2010
Ex.P240(a) Signature of PW.31
Ex.P241 Letter dt:11.04.2009
Ex.P241(a) Signature of PW.31
Ex.P242 Attendance register of Vijaya Bank
from July 2007 to August 2008
Ex.P243 Incumbent Register of Vijaya
Bank
Ex.P243(a) Relevant entry in page No.7
Ex.P244 Letter dt:27.10.2009
Ex.P244(a) Signature of PW.31
Ex.P245 Letter dt:27.11.2009
Ex.P245(a) Signature of PW.31
Ex.P246 Certified copy of cheque returning
register dt:16.04.2008 &
01.07.2008 (2 sheets).
Ex.P246(a & b) Relevant entries in Ex.P246
Ex.P247 Certified copy of Vijaya Bank
manual of advances-2003, Vol-III
Ex.P247(a) Relevant entry in Page Nos.10 to
14
Ex.P248 Certified copy of Vijaya Bank
Booklet on delegation of powers
dt:01.04.2008
Ex.P249 Certified copy of Vijaya Bank
manual of book of instructions
(current accounts).
Ex.P250 Hypothecation Agreement
dt:11.09.2007 with 30 stamp
paper
Ex.P251 Account opening form of M/s
Stratycon Technologies Pvt. Ltd.,
of HSBC Bank with enclosures
Ex.P252 Certified copy of extract of
statement of accounts of HSBC
(242 sheets)
Ex.P252(a) Relevant entry in Page No.170
Ex.P252(b) Relevant entry in page No.181
Ex.P252(c) Relevant entry in page No.183
Ex.P252(d) Relevant entry in page No.196
Ex.P252(e) Relevant entry in page No.196
Ex.P252(f) and (g) Relevant entry in Ex.P252 241 Spl.C.C.No.5/2010 Ex.P253 Valuation report dated 26.06.2008 by M/s Nuthan Associates (11 sheets) Ex.P253(a) Signature of PW.34 - Nuthan Shetty Ex.P254 Relevant portion marked in Witness statement of PW 34/CW.36 Ex.P255 Sanction order dt:17.12.2009 Ex.P255(a & b) Signature of PW.35 - K. Jayakara Shetty Ex.P256 Opinion of PW.38 - Y. Surya Prasad along with reasoning's and covering letter Ex.P256(a & b) Signatures of PW.38 Ex.P256(c) Signature of Sri Mohindar Singh Ex.P257 Letter dt:02.02.2008 addressed to Chief Manager, Vijaya Bank by M/s. Stratycon Technologies Pvt.
Ltd.
Ex.P258 S1 to S11 of accused No.1
Ex.P259 S12 to S21 of accused No.2
Ex.P260 S22 to S37 of accused No.3
Ex.P261 S38 to S49 of accused No.4
Ex.P262 S50 to S59 of accused No.3
Ex.P263 S60 to S74 of accused No.2
Ex.P264 S75 to S86 of accused No.5
Ex.P265 S87 to S98 of CW.35-
Vidyalakshmi
Ex.P266 Account opening form of M/s
Stratycon Technologies Pvt. Ltd.,
in Bank of Baroda, BTM Layout
and its enclosures (9 sheets)
Ex.P267 Loan paper of Vijaya Bank
submitted by accused No.5
(consisting of 20 sheets)
Ex.P268 Letter dt:31.07.2009
Ex.P268(a) Signature of PW.39 - H.M.
Venkatesh
Ex.P268(b to d) Encumbrance Certificates (3) Ex.P269 Letter dt:01.08.2009 242 Spl.C.C.No.5/2010 Ex.P269(a) Signature of PW.39 Ex.P269(b) Encumbrance Certificate Ex.P269(c) Certified copy of one document pertaining to deposit of title deeds.
Ex.P.269(d) Certified copy of sale certificate.
Ex.P270 Letter dt:02.08.2009 (clarification
letter)
Ex.P270(a) Signature of PW.39
Ex.P271 Letter dt:17.08.2009
Ex.P.271(a) Signature of B.G Kamala
Ex.P.271(b) Encumbrance certificate
Ex.P272 Letter dated 11.06.2014
Ex.P.272(a) Encumbrance certificate
Ex.P273 Letter dt:17.04.2009
Ex.P273(a) Encumbrance Certificate
Ex.P274 Letter dt:05.05.2009
Ex.P274(a & b) Encumbrance Certificates (2) Ex.P275 Statement under section 161 of Cr.P.C., of CW.35/PW.40 Ex.P276 Search List dt:02.01.2009 Ex.P276(a) Signature of PW.41 - Jaboy K.R. Ex.P277 Search List dt:02.01.2009 Ex.P278 Proceedings conducted on 02.01.2009 Ex.P279 Search List dt:05.01.2009 Ex.P279(a) Signature of PW.41 Ex.P280 Search List dt:05.01.2009 Ex.P280(a) Signature of PW.41 Ex.P281 Search List dt:02.01.2009 Ex.P282 Letter dt:06.02.2009 (receipt memo) Ex.P283 Receipt-Memo dt:11.02.2009 Ex.P283(a) Signature of PW.41 Ex.P284 Resolution copy dated 29.10.2007 of M/s Stratycon Technologies Pvt. Ltd., Ex.P285 Letter dated 06.09.2007 of HDFC Bank.
Ex.P286 Loan sanction intimation letter dt:11.09.2007 243 Spl.C.C.No.5/2010 Ex.P287 Certified copy of sale deed dated 13.09.2006.
Ex.P288 Debit Voucher along with copy of DD voucher Ex.P289 Debit Voucher along with three DD Voucher copies Ex.P290 Inspection report for landed property dt:24.06.2008 Ex.P291 Copy of letter dt:26.09.2008 of Vijaya Bank to M/s. Stratycon Technologies Pvt. Ltd.
Ex.P292 Seizure Memo dt:25.02.2009
(Receipt Memo)
Ex.P292(a) Signature of PW.41
Ex.P293 Receipt Memo dt:09.03.2009
Ex.P293(a) Signature of PW.41
Ex.P294 Letter dt:13.03.2009 of Vijaya
Bank
Ex.P295 Letter dt:26.03.2009
Ex.P296 Receipt Memo dt:11.04.2009
Ex.P297 Receipt Memo dt:13.04.2009
Ex.P297(a) Signature of PW.41
Ex.P298 Letter dt:22.04.2009 of
Corporation Bank
Ex.P299 Receipt Memo dt:30.04.2009
Ex.P299(a) Signature of PW.41
Ex.P300 Receipt memo dt:30.04.2009
Ex.P300(a) Signature of PW.41
Ex.P301 Receipt memo dt:02.05.2009
Ex.P301(a) Signature of PW.41
Ex.P302 Monthly return of Vijaya Bank,
Koramangala Branch for the
months of August and September
2007 (Jan 2008 & April 2008 also)
Ex.P303 Sanction proceeding register for
ad-hoc sanction for the month of
September and December 2007
and March and April 2008
Ex.P304 True copy of 5 letters dated
7.12.2007, 10.04.2008,
23.5.2008, 16.06.2008 and
244 Spl.C.C.No.5/2010
14.7.2008 of Vijaya Bank (copies
of reminders for non-submission
of periodical returns)
Ex.P305 Receipt Memo dt:05.05.2009
Ex.P305(a) Signature of PW.41
Ex.P306 Receipt Memo dt:21.05.2009
Ex.P306(a) Signature of PW.41
Ex.P307 Letter dated 24.11.2009 of HDFC
Bank.
Ex.P308 Certified copies of loan application
form, account statement,
repayment schedule, car loan
agreement terms and conditions
for purchase of car by Mithun
Narayan
Ex.P309 City Bank letter dt:09.12.2009.
Ex.P310 F.I.R.
Ex.P310(a) Signature of S.P.,
Ex.P311 Letter of Guarantee dt:30.10.2007
Ex.P312 Certified copy of Manual of
advances (cash credit
miscellaneous account) Volume-
II, 2002-2003.
Ex.P313 Two letters dt:18.04.2009 of
Vijaya Bank
Ex.P314 Covering letter dt:31.07.2014
Ex.P314(a) Signature of PW.42- K.V.
Chandrashekar
Ex.P315 Account Extract of A/c
No.139400301000330 of M/s.
Stratycon Technologies Pvt. Ltd.,
maintained by Vijaya Bank.
Ex.P315(a) Signature of PW.42
Ex.P315(b) Relevant portion in Ex.P315 Ex.P316 Copy of account statement of M/s Stratycon Technologies Pvt. Ltd., (4 sheets) including certification sheets Ex.P317 Letter dt:01.08.2014 of Vijaya Bank Ex.P317(a) Signature of PW.42 245 Spl.C.C.No.5/2010 Ex.P318 Copy of account statement in respect of 2 secured loan accounts of M/s Stratycon Technologies Pvt.
Ltd. bearing
Nos.139409041000069 and
139409041000073 and the
account extract consisting of 4
sheets including certificate sheet
pertaining to account No....69.
Ex.P318(a) Signature of PW.42
Ex.P319 Account extract copy in respect of
account pertaining to ....073
consisting of 2 sheets including
certification
Ex.P319(a) Signature of PW.42
Witness examined on behalf of the accused :
NIL Documents marked on behalf of the accused :
Ex.D1 Concurrent Audit Report from
November 2007 to June 2008 (Page
No.223 to 549)
Ex.D2 Xerox copy of the model sanction
order
Ex.D3 Letter dt:16.12.2009 (office note)
Ex.D4 Letter dt:02.12.2009
Ex.D5 Xerox copy of model sanction order
Ex.D6 Letter dated 02.12.2009
Ex.D7 Letter dated 31.01.2013 with copy
of duties and responsibility of Asst. Branch Manager of Vijaya Bank Ex.D8 Certificate dated 29.01.2008 issued by Chartered Accountant (SHIVANNA), XLVIII Addl. City Civil & Session Judge (Special Court for trial of CBI Cases), Bengaluru (CCH-49).
*HRN/-