Bangalore District Court
Central Bureau Of Investigation vs Sri.A.E.Devendranath on 31 August, 2016
IN THE COURT OF THE XXXII ADDL.CITY CIVIL AND
SESSIONS JUDGE AND SPL.JUDGE FOR CBI CASES,
BANGALORE (CCH.34)
Dated This the 31st day of August, 2016
-: P R E S E N T :-
Sri.Pradeep S. Balikai, B.Com., LL.B (Spl.).,
XXXII Addl.City Civil & Sessions Judge
& Spl.Judge for CBI Cases, Bangalore.
Spl.C.C.No.157/2001
COMPLAINANT:- Central Bureau of Investigation,
Anti Corruption Branch, Bengaluru.
(Rep. By Spl. Public Prosecutor)
-Vs-
ACCUSED:- 1. Sri.A.E.Devendranath,
S/o Late A.Ethirajan, Aged 54 years,
Officer-MM-III (Inspection Department),
Andhra Bank, Zonal Office, Chennai-18,
-R/o No.4, NHCS Layout, 8th Main,
Vijayanagar, Bangalore-560 040.
2. M/s.J.J.Fashion Studio Pvt.Ltd.,
Represented by it's Director
-Mr.F.Don Bosco, S/o AH M Manuel Joseph,
No.13, II Floor, III Cross,
Lalbagh Road, Bangalore.
3. Sri.N.Gangadhar @ Surya Prasad,
S/oLate Nanjaiah,(M.V.Enterprises),
Aged 44 years, No.1228, 1st Main,
3rd Cross, K.N.Extension,
Yeshwanthapura, Bangalore-560022
(A.1 : By Sri.B.Shankar Bhat-Adv.
A.2 : By Sri.T.Mohandas Shetty-
Adv.&
A.3 : In person)
2 Spl.C.C.No.157/2001
Date of commission of : Between 22.01.1994 to
the offence/s 31.03.1997
Date & time of Report : 27.12.1999/7.35 PM
of the offence/s RC 15(A)/1999
Offences charged : U/secs.109 r/w.Sec.420 of
I.P.C. and u/sec.13(2) r/w.
Sec. 13(1)(d) of the
P.C.Act, 1988
Name of the : Sri.GVUN Murthy, AGM,
Complainant Andhra Bank.
Date of arrest of the : A.1 & A.3 : Not arrested
accused
A.2 : 15.02.2006
Period undergone in : A.1 & A.3: Nil
J.C.by the Accused
A.2 : From 15.02.2006
to 12.04.2006(bdi)
Date of commencement : 20.04.2011
of the evidence
Date of closure of the : 05.09.2014
evidence
Final Verdict : A.1 & A.2 - Convicted
A.3 - Acquitted.
(Pradeep.S.Balikai)
XXXII Addl.City Civil and
Sessions Judge and Spl.Judge for
CBI cases, Bangalore.
3 Spl.C.C.No.157/2001
JUDGMENT
The Inspector of Police, CBI/SPE/BNG., has filed this Charge Sheet against the accused alleging that they have committed the offences punishable u/secs.109 r/w.Sec.420 of I.P.C. and Sec.13(2) r/w.Sec.13(1)(d) of The Prevention of Corruption Act, 1988.
2. In brief the prosecution case is as below:-
During the years 1994-97, A.1 was working as the Br. Manager of Andhra Bank, Chamarajpet Branch, Bangalore. A.2-Company was availing credit facilities with the said Bank represented by its Director/Mr.F.Don Bosco and A.3 is a Financier having principal place of function at Yeshwanthapura, Bangalore. A.1 while functioning as a Public servant in the capacity of Br. Manager, Andhra Bank, Chamarajpet Branch, Bangalore, by abusing his official position and by willful misrepresentation and concealment of material facts had financed M/s.J.J.Fashion Studio, a Partnership Firm which was later converted to a Company/ M/s.J.J.Fashion Studio Pvt. Ltd, represented by Mr.F.Don 4 Spl.C.C.No.157/2001 Bosco, by way of Packing Credit Advances and Foreign Bill Purchase limits, by entertaining an incomplete application and by obtaining sanction for Packing Credit (PC) limits of Rs.30 Lakhs from the competent authority and by releasing PCs far beyond the sanctioned limits, in violation of the laid down procedures and terms & conditions of the sanction, thereby enabling A.2 to cheat the Bank, causing wrongful loss to the tune of Rs.44,89,580.00 to the Bank and corresponding wrongful gain to A.2-Company, represented by its Director/Mr. F.Don Bosco and for himself.
Further, A.1 during the period from 1994-97 had accepted discrepant Foreign Export Bills of A.2-Company, on collection basis and had given instant credits to the Company against such Bills which were not realised, by debiting the head "Bills Receivable Suspense Account/Items in Transit", without waiting for the realization of the Bills, and in some cases, even before the Bills were sent for collection. A.1 had also indiscriminately purchased discrepant Foreign Export Bills of A.2-Company, even without having any sanctioned limits and thereby caused wrongful loss to the tune of 5 Spl.C.C.No.157/2001 Rs.38,12,141.05 to the Bank and corresponding wrongful gain for A.2-Company represented by the Director/Mr.F.Don Bosco and for himself. Further, Mr.F.Don Bosco resorted to self withdrawals to the tune of Rs.18,41,000/- and diversion of funds to the tune of Rs.21,85,000/- to the Sister concerns of M/s.J.J.Fashion Studio. i.e., (i) M/s.First Fashion Code Pvt. Ltd and (ii) M/s. Premier Fashion Code. Thereby, the Bank was exposed to irrecoverable loss to the tune of Rs.1,44,72,580.38, inclusive of interest and corresponding wrongful gain was obtained by A.2-Company and the Director
- Mr. F.Don Bosco.
Further, A.1 during the said period of 1994-97 accepted properties of Sri.B.K.Doraiswamy/C.W.16 and Sri.D.Martin/C.W.17 which were executed by A.3 as third party collateral securities on behalf of M/s.J.J.Fashion Studio Pvt. Ltd, to release the credit facilities, without the knowledge of owners and did not ensure the genuineness of the mortgage and exposed the Bank to face litigation at the hands of the property owners. A.2-Company represented by its Director procured collateral securities of C.Ws.16 & 17 6 Spl.C.C.No.157/2001 from A.3 by making payments without the knowledge of property owners and submitted to the Bank to create mortgage. Further, he used to submit false and inflated Stock Statements to A.1 to arrive at drawing Power for PC releases and cheated the Bank. Thus, A.3 intentionally aided A.2 to cheat the Bank by providing Property documents of C.Ws.16 & C.W.17 which were in his possession for finances provided by him to the owners without their knowledge. As such, prosecution alleges that all the accused have committed the offences punishable u/secs.109 r/w.Sec.420 of I.P.C. and Sec.13(2) r/w.Sec.13(1) (d) of The Prevention of Corruption Act, 1988.
3. After conducting investigation, the Investigating Officer/CBI/SPE/BNG has laid Charge Sheet against all the accused on 31.08.2001/03.09.2001. After filing the Charge Sheet summons were sent for the appearance of accused. Subsequently, as A.2/Mr.F.Don Bosco failed to appear before the Court inspite of compelling process taken against him, case as against him was spilt up vide Order Dt.05.12.2001 and spilt-up Spl.C.C.No.232/2001 was registered against him. 7 Spl.C.C.No.157/2001 Thereafter, as A.2 was secured, separate spilt up Spl.C.C.No.232/2001 initiated against A.2 was clubbed with this case vide Order Dt.04.03.2006 and vide Order Dt.10.07.2006 split-up Spl.C.C.No.232/2001 was closed.
4. A.1 & A.2 are represented by their counsel and they have been enlarged on bail also. A.3 has not engaged Counsel and in person he is conducting the case. Copies of the Charge Sheet papers were furnished to all the accused as provided u/sec.207 of Cr.P.C. The IO has produced the required Sanction Order in Ex.P.99 to prosecute A-1 as required u/s.19(1)(c) of the Prevention of Corruption Act, 1988. P.W.32 is the Sanctioning Authority to prosecute A.1 in the case.
5. After hearing the accused, Charge was framed and read over to the accused in the language known to them on 22.07.2006. The entire case levelled against accused has been denied in to-to and the accused have claimed to be tried for the offences alleged.
8 Spl.C.C.No.157/2001
6. To prove the offences levelled against the accused, Prosecution has examined P.Ws.1 to 39 and has relied on the documents marked in Ex.P.1 to P.304. Ex.D.1 to D.7 are marked for the accused side. Thereafter, statement of the accused is recorded on 10.10.2014 as provided u/s.313 of Cr.P.C. No defence evidence is produced by the accused.
7. Heard arguments at length canvassed by both side.
8. The points that arise for my consideration are as below:-
1) Whether the prosecution proves that the Sanction Order in Ex.P.99 issued by the Sanctioning Authority for the prosecution of A.1 is valid and legal one?
2) Whether the Prosecution proves beyond reasonable doubt that A.1 during the period of 1994-1997 while functioning as the Br.
Manager, Andhra Bank, Chamarajpet, Bangalore, at the instigation of A.3 and in consequence of the abetment, abusing his official position by willful misrepresentation or by willful concealment of material facts which he was bound to disclose or by accepting 9 Spl.C.C.No.157/2001 discrepant Foreign Exchange Bills of A.2 Co., against such bills which are not realized by debiting the head -"BRS/Items in Transit", without waiting for realization of the Bills, intentionally aided A.2 Co., for Packing Credit advances and Foreign Bill Purchase limits beyond the sanction limits and cheated the Bank causing huge wrongful loss and corresponding wrongful gain for A.2 Co., and for himself and thereby committed the offence U/s.109 r/w. Sec.420 of I.P.C.?
3) Whether the Prosecution further proves beyond reasonable doubt that during the above period A.2 in order to cheat the Bank, regarding sanction and release of Packing Credit limit loan of Rs.30 lakhs in favour of M/s. J.J. Fashion Studio Pvt., Ltd., submitted false and inflated Stock Statements regarding the said Co., or did not furnish complete information along with enclosures or allowed the Packing Credit against Fax copies of the order in the name of sister Concern of M/s.
J.J. Fashion Studio Pvt., Ltd., and thereby committed the offence U/s.420 of I.P.C.?
10 Spl.C.C.No.157/2001
4) Whether the Prosecution further proves beyond reasonable doubt that during the above period A.3 by receiving the 'Documents of Title' of the properties of C.Ws.16 and 17, extending some finance to them for the purpose of celebrating marriage of the daughter of C.W.16 and for constructing house of C.W.17, kept them in darkness of creation of 'Mortgage' of their properties by depositing the Title Deeds of their properties with the Bank which prima facie shows abetting to cheat the Bank regarding sanction and release of Packing Credit limit of Rs.30 lakhs by A.1 in favour of A.2 Co., and thereby committed the offence punishable U/s.109 r/w. Sec.420 of I.P.C.?
5) Whether the Prosecution further proves beyond reasonable doubt that during the above period A.1 being a Public Servant by use of corrupt or illegal means or abusing his position as Public Servant, obtained for A.2 Co., pecuniary advantage comprising of grant of Packing Credit advance of Rs.30 lakhs and thereby committed the offence punishable U/s.13(2) r/w. 13(1) (d) of the P.C. Act, 1988?
6) What order?
11 Spl.C.C.No.157/2001
9. My findings on the above points are as under:-
Point No.1 : In the 'Affirmative'.
Point No.2 : 'Partly in the Affirmative' Point No.3 : In the 'Affirmative' Point No.4 : In the 'Negative' Point No.5 : In the 'Affirmative' Point No.6 : 'As per final Order' for the following:-
REASONS
10. Point No.1:- Learned Counsel representing A.1 strenuously contends that the prosecution has utterly failed to prove that there is valid Sanction Order accorded to prosecute A.1 for the offences levelled. The so called Sanction Order produced in Ex.P.99 is a concocted document and the Sanction Order obtained is without application of mind and with an oblique motive of prejudicial mind. Further, the Sanction Order in Ex.P.99 is not a valid Sanction Order as provided in Sec.19 of the P.C.Act and it does not empower this Court to take cognizance and to prosecute A.1, who is a Public Servant, for the offences charged. As such, 12 Spl.C.C.No.157/2001 the proceeding that has taken place against A.1 is irregular, which vitiates the entire proceedings as contemplated u/sec.461 of Cr.P.C. Here P.W.32/A.V.Suryanarayana Rao has granted the requisite Sanction to prosecute A.1, being the Br. Manager. It is not in dispute that A.1 during the years 1994-1997 was working as the Br. Manager, Andhra Bank, Chamarajapet Branch, Bangalore at the time of which the alleged incident took place.
11. P.W.32 has stated in his evidence that in the year 2001 he was working as the General Manager (Personnel) Andhra Bank, Head Office at Hyderabad (A.P.) and as the General Manager he was competent to remove a person holding the post of a Manager Scale-III of Andhra Bank Branch from service. The Branches of Andhra Bank in the State of Karnataka were under the Administrative control of Andhra Bank, Zonal Office, Bangalore. The Corporate Office of Andhra Bank was situated at Hyderabad of which he was the General Manager then. All the Zonal Offices are under the control of the Corporate Office of Andhra Bank. During the period when the incident took place, Andhra Bank 13 Spl.C.C.No.157/2001 Chamarajpet Branch, Bangalore was having the Manager of Scale-III Grade and he was the Competent Officer to remove the said Manager of Andhra Bank, Chamarajapet Branch, Bangalore from service. He speaks that A.1 was the Manager of Andhra Bank, Chamarajapet Branch, Bangalore when the alleged incident took place. From the Office of the CBI, he had received a request Letter to accord necessary Sanction to prosecute A.1 for the offences charged.
12. P.W.32 has further spoken in his evidence that on the receipt of request Letter from the Office of CBI., he went through the copies of the entire papers forwarded by the CBI to the Office, which included the Statements of Witnesses, Copy of the FIR and the Investigation Report of the I.O. He speaks that on perusal of all these in detail, he was satisfied himself that there is a prima facie case made against A.1 for his criminal prosecution and accordingly, he accorded Sanction to prosecute A.1 and issued the Sanction Order as per Ex.P.99. Signature of the witness on the document is marked as Ex.P.99(a). In the cross examination, it is firmly denied by him that before according necessary 14 Spl.C.C.No.157/2001 Sanction to prosecute A.1 he has not applied his mind to any of the documents furnished to him. It is also firmly denied by the witness that he has issued the Sanction Order in Ex.P.99 only at the request of the I.O.
13. I have gone through the evidence of P.W.32. I have also perused the Sanction Order in Ex.P.99 Dt. 28/08/2001. On careful analysis of the evidence of PW.32 along with the document in Ex.P.99, I am of the firm view that P.W.32 is the Competent Authority to issue the Sanction Order for the prosecution of A.1. There is nothing elicited in the cross-examination of P.W.32 to suggest that either he lacked competence or failed to apply his mind to enter satisfaction about the existence of prima facie case for according Sanction for the prosecution of A.1. Mere suggestions directed to the Sanctioning Authority stating that without proper application of mind the Sanction Order has been issued in the case is not sufficient, in my view. When there is specific evidence regarding the power to accord sanction by P.W.32, the person who challenges that he did not had the authority to prosecute the accused, has to show 15 Spl.C.C.No.157/2001 that P.W.32 had no power to accord sanction; if necessary by calling for the relevant Rules and documents. In the decision reported in (2002) SCC (Cri) 564 (Shivendrakumar Vs. State of Maharashtra), it is held by the Hon'ble Apex Court that it is for the party who challenges that the authority competent to accord Sanction but, some other who is competent to grant Sanction Order to prosecute the accused and not the person who accorded the Sanction.
On evaluation of the evidence of P.W.32 and on careful perusal of Ex.P.99, I am of the considered opinion that the prosecution has ably proved that the Sanction Order obtained here to prosecute A-1 who was the then Br. Manager of Andhra Bank, Chamarajapet Branch, Bangalore is valid and legal Sanction Order under law. As such, I hold the point for consideration in 'Affirmative'.
14.Point Nos.2 to 5:- All these points being connected to each other, in order to avoid repetition of appreciation of evidence adduced by the prosecution, these points have been taken by me together for common consideration and discussion. Here the prosecution has examined PWs.1 to 39 16 Spl.C.C.No.157/2001 to prove the case levelled against the accused. PWs.1 & 2 are the title holders of the properties which are stated to be mortgaged with the Bank, P.W.3 speaks about the P.C. Advances, P.W.4 has stated about the irregularity committed by A.1, PWs.5, 6, 10, 11, 19 and 34 are the Bank Officers, P.W.7 has stated about the ECGS, P.W.8 is the General Manager (Credit), Head Office, Andhra Bank, Hyderabad, P.W.9 is the subsequent Manager who succeeded A.1 in the Bank and speaks regarding the bad shape of the Loan A/c. of A.2-Co., P.W.12 has spoken regarding the mortgage of the title deeds of the property held by P.W.2, P.W.13 is the D.G.M. of Canara Bank, P.W.14 is the Chief Manager, P.W.36 is the Chief Vigilance Officer who conducted the internal investigation of the Bank. PWs.15 to 18, 20 to 23 and 27 are the business persons who had dealings with A.2-Co. or it's sister concerns at some time during or earlier to the incident, P.Ws.24 & 30 are the panel Advocates of Andhra Bank, Chamarajpet Branch who have furnished legal opinion in the case, P.W.25 is the Bank Officer, P.W.26 speaks regarding how the Current A/c. in the Bank operates, P.W.28 has also carried internal investigation of the Bank, P.W.29 is 17 Spl.C.C.No.157/2001 the Chartered Accountant who has inspected the Stock & Trade of A.2-Company P.W.31 is the Complainant, P.Ws.33 & 35 are the Bank officers and P.Ws.37 to 39 are the I.Os.who have investigated the case and laid charge sheet against the accused in the case.
15. P.W.1 has stated in his evidence that he was allotted a Site by the B.D.A. in the year 1994. The Sale Deed Dt.16/11/1994 executed by the B.D.A. in favour of P.W.1 is marked as per Ex.P.1. Witness states that when he was mobilizing the funds for performing his daughter's marriage during the year 1994, he came in contact with A.3 since he had given an Advertisement for lending loan in the capacity as a Financier. Believing the said Advertisement, he had approached him and handed over the Original Sale Deed in Ex.P.3 for obtaining loan on 24/11/1994. A.3 handed over a Cheque Dt.24/11/1994 for Rs.1.00 lakh as per Ex.P.2. A.3 was doing the finance business in the name and style M.V.Enterprises at Yeshwanthapura, Bangalore. Witness speaks that on the very day itself when the sale deed was handed over by him, A.3 obtained his signatures on three 18 Spl.C.C.No.157/2001 Stamp Papers without disclosing the contents of the same. He identifies that Ex.P.3 is the Power of Attorney. However, he speaks that he has not executed this Power of Attorney in favour of A.3 and his signatures on the said document were taken by him without disclosing the contents of the same. He speaks that when executing the Deed in Ex.P.3 he has not gone to the Office of Notary Public by name Sri.B.Gangappa. His daughter's marriage was performed on 28/11/1994 and on that day he was busy in performing his daughter's marriage and as such he has not gone to any Notary Public. Witness speaks that on 20/12/1995 A.3 issued another Cheque for Rs.50,000/- as per Ex.P.4 in his favour. Thus, A.3 has paid in all Rs.1,50,000/- to him through two Cheques. On 29/11/1994 when he met A.3 and enquired him about the contents of Ex.P.3 and his signatures taken on that day, though initially A.3 gave evasive reply, when he told him that he will lodge a complaint, A.3 informed that he will not misuse the Power of Attorney in Ex.P.3. Subsequently, A.3 executed a Revocation of Power of Attorney Dt.1/12/1994. Xerox copy of the Revocation of the Power of Attorney Dt.01/12/1994 executed by A.3 is marked as Ex.P.5 subject 19 Spl.C.C.No.157/2001 to the production of the original of the said Deed. He came to know about the fraud played on him by A.3 in the matter of misuse of the Power of Attorney and the original Sale Deed belonging to him when he received a Notice from the Andhra Bank stating that the property owned by him has been used as security for the loan sanctioned in favour of M/s. J.J.Fashion Studio Pvt.Ltd. Thereafter, he gave reply to the Andhra Bank denying about he offering his property as security for the alleged loan obtained by M/s.J.J.Fashion Studio Pvt. Ltd. Even a police complaint was lodged by him with Chamarajpet P.S. against A.3. In this regard he had filed Civil Suit in OS.No.8780/1997 against A.1 and A.3. Witness speaks that he has been enquired in the case by the CBI also.
16. P.W.2 has spoken in his evidence that he came to know A.3 through Moses & Robert who are his Agents. A.3 is doing financial business in the name of M/s. M.V.Enterprises at Yeshwanthapura, Bangalore. He was intending to construct a house in the year 1997. To meet his financial requirements he approached A.3 and when he agreed to 20 Spl.C.C.No.157/2001 extend loan to him, at his request he has handed over the original documents of the property held by him to A.3. Witness states that he has handed over the original Sale Deed of his property Dt.22/05/1961 marked in Ex.P.6 and the original Partition Deed Dt. 12/01/1995 marked in Ex.P.7. Witness further speaks that he has also handed over the original Katha Certificate, Bifurcation Certificate, Tax Paid Receipts for the period 1996-97 and Nil Encumbrance Certificate to him at that time. Witness further states that at that time i.e. on 19/01/1997 A.3 took his signatures on some blank printed Forms at the time of giving the acknowledgment of receipt of the documents handed over to him for extending loan. Form R-255 of Andhra Bank Dt.04/03/1997 is marked as Ex.P.8. Stamp Paper containing Letter of Guarantee is marked as Ex.P.9 and Form No.291/Letter of Guarantee executed by the witness is marked as Ex.P.10. Ex.P.11 is the Letter addressed by P.W.2 Dt. 03/03/1997 to Andhra Bank. Witness states that Ex.P.8 to P.11 are not in his hand writing and the said documents were not filled when his signatures were obtained. Though A.3 had agreed to extend loan of Rs.3 Lakhs, he paid cash of 21 Spl.C.C.No.157/2001 Rs.50,000/- only on 06/01/1997 and issued a Cheque for Rs.2,35,000/- Dt.25/01/1997, after deducting his Commission of Rs.15,000/-. Thereafter he came to know from the newspaper that his property has been mortgaged with Andhra Bank, Chamarajpet Branch, Bangalore for extending loan to M/s. J.J.Fashion Studio Pvt. Ltd. In fact, he does not know the owner of the said concern. On 09.08.1997 he came to know about the fraud played on him. Andhra Bank, Chamarajpet Branch had sent Notice to him regarding his liability to clear off the loan sanctioned to M/s. J.J.Fashion Studio Pvt. Ltd. based on the documents of title mortgaged to the Bank. He approached his lawyer with the said Notice caused from the Bank and sent a reply notice to the Bank. Thereafter, even he had filed a Civil Suit in OS.No.4934/1998 against A.1 to A.3 in respect of his property documents. Even he has filed a Criminal case against A.3. Witness states that he too has been examined by the C.B.I. in the case.
17. P.W.3 has stated in his evidence that he was working as an Officer of Andhra Bank, N.R. Road Branch, 22 Spl.C.C.No.157/2001 Bangalore during the years 1996 to 2001. At that time from 1997 to 2001 he worked in the said branch in the Foreign Exchange Department. As he has put in more than 34 years of service in the Bank in various capacities he is aware of the procedure followed by the Bank for the purpose of Packing Credit Advance (PCA) and Purchase of Export Bills. Packing Credit is an advance given to the Exporter for preparing goods for export to the overseas buyer. Packing Credit is given for procurement of raw materials, processing and manufacture of goods and exporting the finished goods to the Exporter. The witness states that for giving Packing Credit Advance there should be an order from the overseas buyer. The Packing Credit facility can be given to the known customer of the Bank who is having a Current A/c. in the Branch. Packing Credit Advance is required to be sanctioned by the Br. Manager if it is within his limits, otherwise by his superior Officer. Superior Officer of the Bank will sanction Packing Credit Advance on the recommendation of the Br. Manager. Documents required for sanction of Packing Credit facilities will be taken care of by the Credit Department. Exporter has to submit an Application in the prescribed 23 Spl.C.C.No.157/2001 Format for sanction of Packing Credit and along with the Application he must submit Purchase Order from the foreign buyer or Letter of Credit. The Letter of Credit will be issued by the Bankers of foreign buyer. The Exporter has to submit stock of the materials to be exported. Packing Credit will be sanctioned to the extent of purchase order received by the Exporter or sanction limit whichever is lower. The Packing Credit facility should not be more than the value of the stock. After release of P.C. advance, the Manager will ensure that such advance amount is utilized for the purpose for which it was given. In case the amount is not utilized for the purpose for which it is released, the Manager may call for explanation from the Exporter. If the Manager is convinced about the misutilization of the advance, he may recall the advance amount and ask the Exporter to repay the amount immediately. The maximum period of Packing Credit facility is up to 180 days. The Exporter shall have to export the goods to the foreign buyer and produce the Export Bills to the Bank. The Bank will then send the Export Bills to the foreign buyer's Bank for valuation. Repayment of Packing Credit cannot be made by the Exporter from any other 24 Spl.C.C.No.157/2001 source except submission of the Export Bill and the amount can be recovered from the foreign buyer through his Bank. If the Packing Credit amount is not realized within 180 days, then the Br. Manager has to inform to his superior Officers and also inform the Export Credit Guarantee Corporation (ECGC). Packing Credit facility will be given before shipment. After the shipment is made by the customer, the Bank can give Export Bill Purchase Facility. For availing this facility the Exporter has to produce Export bills, foreign buyer's Purchase Order or Letter of Credit followed by Invoice, Customs GR Form, Bill of Lading or Airway Bill, Bill of Exchange, Packing list and Certificate of Origin. If finished goods are to be exported, the Exporter must produce Inspection Certificate from third party certifying the quality and quantity of goods. It is the duty of the Manager to see that one of the parties take transit insurance. The witness states that there is a Format for submitting for purchase of export bills. If the parties have entered into any agreement or any other document mentioned in Letter of Credit, such agreement or document also will have to be produced. The Officer of the Foreign Exchange Department 25 Spl.C.C.No.157/2001 will have to verify all the documents to ensure whether it is in order or not. If the documents are in order, the Bank will purchase the bill and obtain the exchange rate from the International Division of the Bank. The witness states that the International Division of Andhra Bank is in Chennai (TN). If the P.C. advance amount is released or there is purchase of Export bill, the Bank will deduct its commission and interest and if it is Packing Credit Advance, credit the balance amount into Packing Credit A/c. or if it is purchase of Export Bills, credit such balance amount to the Current A/c., if there is no Packing Credit. After availing P.C. facility Exporter will export the goods and submit the Export Bills to the Bank and the Bank will purchase those Export Bills and credit the amount to the P.C. Advance. When the amount is received from Foreign Buyer's Bank, the same is adjusted towards purchase of Export Bills after deducting Bank's commission and interest. Once the Export Bills submitted by the Exporter are accepted by the Bank, they cannot be returned to the Exporter and they will have to be sent to Foreign Buyer's Bank. The amount will become overdue after lapse of 30 days of the due date as per the 26 Spl.C.C.No.157/2001 tenure of the Export Bills. Once the Export Bill is categorized as overdue, the Br. Manager has to follow up with the Exporter and also Foreign Buyer's Bank. Exporter can seek extension of time as required by the buyer for specific reasons. Such letter of the Exporter must be supported by the request of the buyer. If the Exporter submits such Application for extension, it will have to be sent to the RBI and such Application is called ETX Form. This was the procedure during the relevant period of this transaction. The witness further speaks that once the purchase of Export Bill facility is given to the Exporter, no other facility can be given except extension of time. If the amount becomes overdue, the Bank has to recover the amount from the Foreign Buyer's Bank with penal interest; if such amount cannot be recovered from the Buyer's Bank then it has to be recovered from the Exporter. The witness states that he has been examined in the case by the C.B.I. with regard to the procedure of Foreign Exchange Department of Andhra Bank.
18. P.W.4 has stated in his evidence that he was working as the Sr. Manager in Zonal Office of Andhra Bank at 27 Spl.C.C.No.157/2001 Bangalore during the period from 1994-98. He was looking after Advances of the Zone. He speaks that loan facilities can be granted by the Branch office, Zonal Office or the Head Office depending on Sanction powers. If the Sanctioning power is with the Zonal Office, the borrower has to first submit proposals to the concerned Branch Office. The Branch office will appraise the proposal and then forward it to the Zonal Office with their recommendation. The Br. Manager has to find out track records of the particular borrower, experience in the activity for which the loan is sought to find out whether there is adequate cover of security to the loan and also to find out whether the facilities sought is within the guidelines of the Bank. When it is sent to the Zonal Office along with recommendation, it will be received by the Officer in the Credit Department. He will verify the appraisal made by the Branch and then after satisfying that the proposal is as per the guidelines and the sanctioning power of the Zonal Office, he would send it to the Sr. Manager Credit, Zonal office. After scrutiny if everything is all right, the proposal will be sent to the Chief Manager. After his scrutiny he will put up the proposal 28 Spl.C.C.No.157/2001 before the Zonal Manager and the Zonal Manager may sanction the loan if it is within his powers. If there are any doubts at any level, clarification may be sought for. In the Zonal Office they verify only the documents and the recommendation made by the Br. Manager. The Application for loan facility made by M/s. J.J. Fashion Studio Pvt. Ltd., dt. 8/11/1994 for Packing Credit of Rs.50 lakhs and Cash Credit of Rs.10 lakhs (consisting of 28 sheets) is marked as Ex.P.12. A.2 is one of the Directors of M/s. J.J. Fashion Studio Pvt. Ltd. The witness states along with the loan Application in Ex.P.12, the borrower had submitted a xerox copy of the Letter of Credit issued by Union Bank of Switzerland (consisting of 3 sheets) in Ex.P.13. The loan Application was submitted to the Andhra Bank, Chamarajpet Branch, Bangalore. Ex.P.14 (consisting of 17 sheets) is the Appraisal Report prepared by A.1 who was the then Branch Manager of the Bank. Signature of A.1 on the Report is marked as Ex.P.14(a) at sheet No.16. A.1 had recommended for sanction of Packing Credit of Rs.60 lakhs with 25% margin for exporting Readymade Garments. He had recommended for a collateral security of land and building worth Rs.60 29 Spl.C.C.No.157/2001 lakhs. Regarding the past experience, the Branch Manager/ A.1 had stated that Mr.F.Don Bosco/A.2 has sufficient experience in the trade and has done turnover of Rs.80 lakhs in the year 1992 through a Co., called M/s. First Fashion Code Pvt. Ltd., where Mr. F. Don Bosco was the M.D. That Co., had availed a loan from Catholic Syrian Bank. In Ex.P.14 the Br. Manager had informed that the Credit facilities at Catholic Syrian Bank is exhausted and they have Export Orders worth Rs.100 lakhs which they wanted to execute through this Co., M/s.J.J.Fashion Studio Pvt. Ltd., for which credit facilities were sought from the Andhra Bank, Chamarajpet Branch, Bangalore. Along with Appraisal Report, A.1 had sent a covering letter dt. 5/11/1994 marked in Ex.P.15 addressed to the A.G.M., Bangalore. Ex.P.15(a) is the signature of A.1. In this letter A.1 had stated that out of the pending sanction of Rs.60 lakhs, the party immediately wants Rs.40 lakhs to execute the orders on time. Further, A.1 had made a note in his hand writing that the party wants Rs.20 lakhs at present for which collateral security worth Rs.20 lakhs will be offered. Below this noting, A.1 had put his signature at Ex.P.15(b). The endorsement of A.1 is in 30 Spl.C.C.No.157/2001 Ex.P.15(c). The witness further states that A.1 had sent office note dt. 12/11/1994 along with Ex.P.14 & P.15. The Office Note is marked as Ex.P.16 and signature of A.1 is marked as Ex.P.16(a). After processing the proposal Zonal Office had prepared Office Note dt. 17/11/1994 as per Ex.P.17. The office note in Ex.P.17 was prepared by the then Credit Officer Mr. Bindu Madhava. Initials of Mr. Bindu Madhava is marked at Ex.P.17(a). The witness states that Mr. Bindu Madhava had recommended for sanction of Packing Credit of Rs.20 lakhs subject to conditions mentioned therein. Ex.P.17 was put up before him by the then Credit Officer Mr.Bindu Madhava and he concurred recommendation of him by putting his initials in Ex.P.17(b). Thereafter, Office Note was put up before the Zonal Manager one Mr. Govinda Rao-C.W.3. He is acquainted with the handwriting and signature of C.W.3. C.W.3 has sanctioned Packing Credit of Rs.20 lakhs subject to 3 conditions out of the 4 conditions mentioned by Mr. Bindu Madhava. The other condition that was mentioned by Mr. Bindu Madhava was that the Br. Manager shall have to take a collateral security of Rs.20 lakhs before releasing of Packing Credit of Rs.60 lakhs. 31 Spl.C.C.No.157/2001 C.W.3 had further stated that it is one time sanction. The two endorsements made by C.W.3 in this regard are marked as Ex.P.17(c) and P.17(d). One more endorsement that was made was that the Branch Officer has to submit Stock Statement within 7 days and this endorsement is marked at Ex.P.17(e). The witness states that each endorsement was initialed by C.W.3 and he could identify the initials of C.W.3. They are marked as Ex.P.17(f) to P.17(h). Ex.P.18 is the Sanction Letter sent by the Zonal Office to the Branch Office. Signature of the witness on the Sanction Letter is marked as Ex.P.18(a). The witness states that in Ex.P.18 all the conditions imposed by C.W.3 are incorporated. Before releasing of the amount of Rs.20 lakhs, Branch Office has to comply with these conditions. The said conditions are :-
i) He has to obtain Private and Confidential Report from Catholic Syrian Branch regarding operations of M/s. First Fashion Code Pvt. Ltd.,
ii) Borrower has to submit the declaration from the manufacturers stating that they will not hypothecate the goods to anybody.
iii) Borrower has to submit property statements of all the Partners.
iv) Branch has to obtain collateral security of Rs.20 lakhs before releasing the loan. 32 Spl.C.C.No.157/2001
v) Branch has to submit Stock Statement within seven days.
The witness has further stated that the borrower was directed to submit Property Statements of all the Partners as at the time of sanction of loan to M/s. J.J. Fashion Studio Pvt. Ltd., it was a Partnership Firm. It is also stated by the witness that all these conditions were required to be fulfilled by the Br. Manager/A.1. Ex.P.19 is a letter dt. 30/12/1994 addressed by A.1 to the Zonal Office regarding change of Partnership Firm into a Private Ltd., Co., A.1 had informed that once M/s. J.J. Fashion Studio Pvt. Ltd., is converted into a Private Ltd. Co., he would execute fresh documents and create charge with the Registrar of Companies as per the Company Act. In Ex.P.19 A.1 had further recommended for additional Packing Credit Limit of Rs.10 lakhs. No separate proposal was sent by A.1 for sanction of additional P.C. He had stated that he has already released Packing Credit of Rs.20 lakhs with this additional limit of Rs.10 lakhs; the total packing credit limit of Rs.30 lakhs will be liquidated once the bills are negotiated. Ex.P.19(a) is the signature of A.1. Based on the recommendations of the Branch, the Zonal 33 Spl.C.C.No.157/2001 Manager sanctioned additional P.C. of Rs.10 lakhs for one month ie., up to 31/1/1995 based on the existing terms & conditions. The endorsement and initials of the Zonal Manager/C.W.3 is marked as Ex.P.19(b) and initials are marked as Ex.P.19(c). Ex.P.20 is the letter for sanction of additional limit of Rs.10 lakhs dt. 30/12/1994 and the signature of the Zonal Manager is marked in Ex.P.20(a). In the Sanction Letter it is stated that the Branch should obtain additional collateral security worth Rs.32.12 lakhs, including the existing security of Rs.20 lakhs. On 2/3/1995 A.1 had sent a letter to the A.G.M., Zonal Office stating that the borrower has submitted Export Bills worth Rs.12 lakhs against sanctioned Packing Credit of Rs.30 lakhs. This letter is marked in Ex.P.21 and signature of A.1 is marked in Ex.P.21(a). It is further stated in the letter that there are further shipments, on 6/3/1995 for Rs.17.5 lakhs and on 10/3/1995 for Rs.12.5 lakhs, which will liquidate the entire packing credit of Rs.30 lakhs. A.1 had submitted that the bills of Rs.12 lakhs are submitted to the N.R. Road Branch, Andhra Bank, since that Branch was authorized Bank to do Foreign Exchange transactions. Ex.P.22 is a letter addressed 34 Spl.C.C.No.157/2001 by the witness to the Br. Manager, Chamarajpet, Bangalore dt. 8/3/1995. Ex.P.22(a) is the signature of the witness. The witness states that in this letter he has stated that the Branch is permitted to release Packing Credit of Rs.30 lakhs on regular basis against Letter of Credit only and the Branch should follow all the terms & conditions of the earlier sanction letters. Ex.P.23 is a letter Dt. 10/3/1995 from Chamarajpet Branch addressed to the Chief Manager, N.R.Road Branch, Bangalore with a copy marked to the Zonal Office, Bangalore. The said letter is signed by A.1 which is marked as Ex.P.23(a). In Ex.P.23 A.1 has made a request to the N.R.Road Branch, Bangalore to discount the two bills worth Rs.9 lakhs and credit the proceeds to the P.C. A/c. of A.2. A copy of the letter was marked to the Zonal Office with a request to permit N.R.Road Branch, Bangalore to discount the two bills. The Zonal Office has permitted N.R.Road Branch through mail in Ex.P.24 to discount the bills subject to the condition that it is in conformity with the Letter of Credit. Ex.P.25 is the letter dt.28/2/1995 addressed from the Chamarajpet Branch to the Chief Manager, N.R.Road Branch, Bangalore signed by A.1 in 35 Spl.C.C.No.157/2001 Ex.P.25(a). In this letter a request was made by A.1 to N.R.Road Branch to purchase another bill for Rs.6,10,611/-. Copy of this letter was also marked to the Zonal Office with a request to permit N.R.Road Branch to purchase the bill. A.1 has also made a request to the Zonal Office to inform N.R.Road Branch to purchase their earlier bill for Rs.4,41,000/-. He had further mentioned that he is enclosing amendment letter received from Canara Bank. The Zonal Office had sent a mail as per Ex.P.26 to N.R.Road Branch permitting it to purchase bills for Rs.6,10,611/- provided it is in conformity with Letter of Credit. A.1 had written a letter as per Ex.P.27 dt. 5/5/1995 to the Zonal Office informing that the Export Bills worth Rs.25 lakhs discounted through N.R.Road Branch has been realized and for the exports done so far the borrower is eligible for duty drawback of Rs.2.99 lakhs. It is also mentioned in the letter that due to urgency Rs.2 lakhs is released against this duty drawback and requesting the Zonal Office to confirm the Branch action for this. Ex.P.27(a) is the signature of A.1. By this letter A.1 had already released the funds of Rs.2 lakhs and wanted the Zonal Office to ratify this action. In the 36 Spl.C.C.No.157/2001 letter in Ex.P.27, the reasons for urgency was/were not mentioned. There is a note recommending to confirm Branch action and also advice the Branch to confirm that irregularities are rectified and inform the present position of the a/c. This note was put up by Mr. Bindu Madhava on the backside of Ex.P.27. It is marked as Ex.P.27(b). The initials of Mr. Bindu Madhava is marked as Ex.P.27(c). That note was put up before P.W.4 by Mr. Bindu Madhava and he made a note that the Branch has to give a clear picture of the a/c. before seeking confirmation. The said endorsement of P.W.4 is marked as Ex.P.27(d) and the initials of the witness is marked as Ex.P.27(e). The said endorsement was agreed by the Chief Manager in the Zonal Office and his initials is marked as Ex.P.27(f). Ex.P.28 is the copy of letter dt. 14/6/1995 addressed by P.W.4 to the Manager, Chamarajpet Branch (A.1) advising him to give clear position of the a/c. for consideration and confirm that documentation irregularities are rectified. It is also mentioned in the letter that on receiving reply will revert to the matter for giving confirmation. Initials of P.W.4 on the letter is marked as Ex.P.28(a). Ex.P.29 is office copy of the letter dt. 1/6/1995 37 Spl.C.C.No.157/2001 addressed by A.1 to the Zonal Office. Ex.P.29(a) is the initials of A.1. In the letter A.1 had informed what are the pending LC's on hand and also informed that at the time of sanction of Packing Credit bill limits were not sanctioned and requested for regular bill limit sanction of Rs.45 lakhs against LC/orders. Further in the letter A.1 has also mentioned that the party has requested for sanction of an ad-hoc Packing Credit limit of Rs.12 lakhs against LC and promised to submit enhancement proposal within a fortnight. It is further stated in the letter that he has released Rs.12 lakhs for a period of 30 days after obtaining permission from General Manager/A.R. Murthy of the Head Office (P.W.8). Br. Manager cannot approach the Head Office directly bypassing the Zonal Office. Zonal Office was unaware of the release of Rs.12 lakhs until it received the letter in Ex.P.29. After receipt of this letter on 14/6/1995 the Zonal Office wrote a letter to the Head Office informing that the Branch has released this Rs.12 lakhs after taking permission from the General Manager/A.R.Murthy. Subsequently the Head office, Hyderabad wrote a letter as per Ex.P.30 dt. 9/8/1995 to the Zonal Office advising A.1 to 38 Spl.C.C.No.157/2001 furnish the information in two standard Proforma. He has made a note as per Ex.P.30(a) to advise Chamarajpet Branch to submit the information in the enclosed format. Ex.P.30(b) is the initials of P.W.4. Ex.P.31 is the office copy of the letter dt. 5/9/1995 written by him to the Chamarajpet Branch requesting to submit the information for onward submission to the Head Office in the required format. Ex.P.31(a) is the initials of P.W.4. Ex.P.32 is the letter dt. 4/7/1995 addressed by A.1 to the Zonal Office informing that the Branch has sought for confirmation of their action in having allowed Packing Credit of Rs.12 lakhs for 30 days after obtaining oral permission from the General Manager/Mr.A.R. Murthy (P.W.8). Ex.P.32(a) is the signature of A.1. In the letter A.1 had further requested the Zonal Office to confirm the action. He made an endorsement in his hand writing advising the Branch to furnish full details of this transaction to enable them to seek confirmation from the Head Office. The said endorsement is marked as Ex.P.32(b). Ex.P.32(c) is the initials of P.W.4. A.1 did not give the particulars seeking confirmation for the release of P.C. of Rs.12 lakhs. Ex.P.33 is the letter from Chamarajpet Branch 39 Spl.C.C.No.157/2001 dt. 4/7/1995 addressed to the Zonal Office enclosing the statement showing bills under items in transit. Signature of A.1 is in Ex.P.33(a). He made an endorsement in his hand writing on Ex.P.33 at Ex.P.33(b) asking the Branch to furnish details of limits, liabilities, due dates and realization dates of those bills. Ex.P.34 is the letter dt. 19/9/1995 addressed from the Head Office to the Zonal Office intimating that they have not received information in the standard Proforma for processing confirmation of Branch action in having released P.C. of Rs.12 lakhs by taking oral permission from the General Manager/Mr.A.R.Murthy. He made an endorsement as per Ex.P.34(a) in his hand writing marked to the Credit Officer Mr. Maduranath advising him to inform the Branch to submit the information in standard format immediately and also informed the Head Office that the proposal was pending at the Zonal Office for want of full information from the Branch. Ex.P.34 (b) is the initials of P.W.4. Ex.P.35 is the letter written from the Zonal Office dt. 25/9/1995 to Chamarajpet Branch advising the Branch to submit information immediately. Ex.P.35(a) is the signature of P.W.4. Ex.P.36 is a copy of the letter from the Zonal 40 Spl.C.C.No.157/2001 Office addressed to the General Manager, Head Office, dt. 25/9/1995. Initials of N.Subbapaiah is marked as Ex.P.36(a). In the said letter it is informed to the Head Office that the proposal was pending at Zonal Office for full clarification from the Branch. Ex.P.37 is a letter dt. 15/7/1995 addressed by A.1 to the Zonal Office. Ex.P.37(a) is signature of A.1. In the said letter it is stated that due to increase in orders, the party's request for ad-hoc Packing Credit was taken up with the General Manager, Head Office, who conveyed oral permission for release of ad-hoc Packing Credit of Rs.12 lakhs. It is also conveyed that the party has projected an export turnover of Rs.400 lakhs and to implement this expansion requires a term loan of Rs.21 lakhs repayable in 21 quarterly installment of Rs.1 lakh each with a holiday period of 2 months. For the sanction and release of Rs.12 lakhs and term loan of Rs.21 lakhs, A.1 had not submitted any proposal in the format of the Bank. Ex.P.38 is the copy of letter from Zonal Office to the Head Office dt. 27/11/1995 signed by N.Subbapaiah, the General Manager, informing the Head Office that track record of the party is not good which can prove costly to the Bank and not to 41 Spl.C.C.No.157/2001 entertain the proposal submitted by the Branch. Copy of this Ex.P.38 is marked to the Branch with an advice to pursue vigorously with the party to see that the liability is adjusted at the earliest. Signature of N. Subbapaiah on the letter is marked as Ex.P.38(a). Ex.P.39 is the Fax Message sent by foreign buyer to the Zonal Office, wherein it is stated that the foreign buyer has made payment wherever there is no discrepancy in the material exported by A.2 and in case of discrepancy regarding the time factor and also the quality he has not made any payment. Whenever there is any breach of terms and conditions of Letter of Credit, the witness states that it will be called as discrepancy and if there is discrepancy, the Bank will not discount the bill but, it will be sent for collection. If discrepancy is set-right and conveyed through, the Bankers will confirm that they will honour the bill with discrepancy, then only it can be discounted. In Ex.P.39 it is also stated that the buyer has discussed the discrepancy noticed by him with A.2. Ex.P.39(a) is endorsement made by the Zonal Office to call for the Branch views. Mr.T.Ravikumar(P.W.14) has inspected the Branch and has submitted his Report dt. 15/10/1995 as 42 Spl.C.C.No.157/2001 per Ex.P.40 (xerox copy consisting of 9 sheets). In his Report P.W.14 has made observations regarding the irregularities in the matter of documentation, conduct of transaction, violation of foreign exchange rules and exceeding discretionary powers. The witness states that duties and responsibilities in respect of sanction and follow-up action etc., are mentioned in the Manual of Instructions of Andhra Bank. Br. Manager or the officials of the Bank are required to inspect collateral security offered by the borrower and it is expected to interview the owner of such collateral security at the time of inspection. In this case there is collateral security given by third party and on record there is no information that A.1 had inspected the property and had interviewed the owner of the property which was offered as collateral security. It is also the duty of the Br. Manager to visit and verify the stocks, which are hypothecated to the Bank. Even the Br. Manager will make self-assessment of the property offered as security based on the prevailing market value in that area, then he will obtain Approved Valuer's Report. Where the borrower had already approached other Bank/s and had already availed credit facility, he is required 43 Spl.C.C.No.157/2001 to obtain Credit Report and NOC from that Bank before availing loan from them. If the borrower happens to be a defaulter in another Bank, one can find out his name in the list of defaulters exhibited by RBI. In the Inspection Report it was mentioned that the Br. Manager had given overdraft facility beyond his discretionary powers. If that be so, he ought to have made a Report to the Zonal Office seeking confirmation of the O.D. facility. If he had sanctioned O.D. facility within the limits, there is a controlled form to report to them periodically. In case of exceeding the limits in sanctioning O.D. facility, he must immediately report to the Zonal Office and seek confirmation. In case of exigency, if it is done by the Branch, the Br. Manager has to seek confirmation immediately from the sanctioning authority through proper channel. In case of exigencies like statutory payments, he may exercise power beyond his discretionary authority based on the track record of the party. In such case he should report to the Zonal Office for ratification. Only after perusal of the Report in Ex.P.40, Zonal Office came to know about temporary O.D. given by A.1 beyond his 44 Spl.C.C.No.157/2001 discretionary powers. The witness states that he has been examined by the C.B.I. in the case.
19. P.W.5 has spoken in her evidence that she was working as a Clerk in Andhra Bank, Chamarajapet Branch, Bangalore from 1989 to Dec. 1995. In the year 1994-95 she was working in the Advances Section of the said Branch and her nature of work in that Advances Section was to prepare the Vouchers as per the instructions given to her by her Superiors. Her immediate Officer in that Advances Section at that time was Mrs.Uma Vasanth (P.W.34). A.1 was the Manager of the Bank at that time. Sometimes she used to prepare the Vouchers though the amount is not received and the said amount is said to be the 'amount in transit'. Debit Voucher Dt.20.04.1995 for Rs.5,98,933/- which was in transit pertaining to M/s.J.J.Fashion Studio Pvt.Ltd., is marked as Ex.P.41. She identifies that Mrs.Uma Vasanth (P.W.34) has put her signature near the Scroll No. in Ex.P.41(a). Credit Voucher Dt.20.04.1995 for Rs.5,98,933/- is marked as Ex.P.42. She states that the amount shown therein was credited to the Current A/c.CD-972 held by M/s.J.J.Fashion 45 Spl.C.C.No.157/2001 Studio Pvt.Ltd. The said Voucher was passed by P.W.34 and her signatures on the Vouchers are marked as Ex.P.42(a) & 42(b). Witness states that Ex.P.41 & 42 were prepared by her at the instructions of P.W.34. She further speaks that the Loan amount of M/s.J.J.Fashion Studio Pvt.Ltd., was handled by A.1.
20. P.W.6 has stated in her evidence that she was a Clerk in the Andhra Bank, Chamarajpet Branch, Bangalore during the relevant period and she used to prepare the Vouchers and make entries in the Ledgers. She identifies that Ex.P.43 is the Ledger sheets pertaining to the Current A/c. No. CD-972 held by M/s.J.J.Fashion Studio Pvt.Ltd. A Debit Voucher Dt.01.06.1995 prepared by her pertaining to this case for a sum of Rs.5 Lakhs belonging to A.2-Company is marked as per Ex.P.44. She speaks that Ex.P.44 was prepared by her at the instructions given by Mrs.Uma Vasanth (P.W.34). By perusing the Credit entry dt.26.05.1995 in Ex.P.43, amounting to Rs.5 Lakhs pertaining to P.C.No.2/1995-96 which is marked as Ex.P.43(a) the witness states that this entry has been made by her and Mrs.Uma 46 Spl.C.C.No.157/2001 Vasanth has put her initials at Ex.P.43(a). Another Credit entry Dt.30.05.1995 with an Endorsement "As on 29.05.1995 by P.C. ad-hoc to the tune of Rs.12,00,000/-" was also made by Mrs.Uma Vasanth as initialed by her. The same is marked as Ex.P.43(b). The entry Dt.01.06.1995 on the Debit side of the A/c of M/s.J.J.Fashion Studio Pvt.Ltd. "to PC excess released adjusted" is marked as per Ex.P.43(c) and the witness states that this entry was made by her only. She speaks that she is familiar with the handwriting, signatures & initials of Mr.Anand Kumar who was one of her Officers. She worked along with him for about 1½ to 2 years. She states that the handwriting of Mr.Anand Kumar found on page no.20 of Packing Credit Register is that of him only which is marked as Ex.P.45. She further states that against the entry as per Ex.P.43(c) at the end there is an endorsement made by her like "TOD till Rs.50,000/- against bill amounting to Rs.10.50 Lakhs as per Manager's instructions" and the said endorsement made by P.W.6 is marked as per Ex.P.43(d). She speaks that A.1 was the Manager of the Bank then and at the instructions given by A.1 through P.W.31/Mrs.Uma Vasanth and Mr. Anand Kumar she has made this entry in 47 Spl.C.C.No.157/2001 Ex.P.43(d). The said endorsement in Ex.P.43(d) would mean that if a Cheque upto Rs.50,000/- if presented they have to honour on TOD in anticipation of the Bill amounting to Rs.10.50 Lakhs. The last Credit entry in Ex.P.43 was on 22.06.1995 for Rs.10,13,445/- and hence, the last entry Dt.30.06.1995 was a withdrawal of Rs.4060/- only. Till 30.06.1995 there were five withdrawals in all and out of this, a portion of the second withdrawal and three withdrawals were made even though there was no credit balance in the A/c. From 30.06.1995 till 17.07.1995 there were withdrawals though there was no credit balance. Since these withdrawals were made when the A/c. was running under debit balance, those were shown in red ink. As on 15.07.1995, the debit balance in the A/c. of M/s.J.J.Fashion Studio Pvt.Ltd. as per Ex.P.43 is Rs.1,88,215.35. All the entries which are made in red ink in Ex.P.43 have been checked and initialed by Mr.Anand Kumar.
21. P.W.7 has spoken in his evidence that since last 31 years he has been working in Export Credit Guarantee Corporation of India Limited (ECGC) and in various places he 48 Spl.C.C.No.157/2001 has worked in different capacities. ECGC is a Government of India undertaking. In case of export of goods from the Country, the ECGC issues policy to the Exporter in order to cover the loss that may be occasioned on account of non payment of money by the buyer. ECGC has been formed to promote export business and they offer themselves as the guarantors in favour of exporters so as to cover the amount advanced to the exporters. They have got two types of guarantees. They are, 1) Whole Turnover Packing Credit Guarantee i.e., pre shipment guarantee; and 2) Whole Turnover post shipment guarantee. The guarantee is issued normally for a period of one year. The witness speaks that after issuance of guarantee by them, the Bank has to fulfill certain conditions stipulated by the ECGC, which are as below:-
(i) The Bank has to notify the sanction limit to the exporter within 30 days from the date of sanctioning the limit. This condition is termed as Standard I, that means for regular account holders and if the transaction with the Bank by the exporter is good.
(ii) Standard II that is irregular account for the time being. The bank can notify the sanction limit to the 49 Spl.C.C.No.157/2001 exporter, which should not exceed the discretion limit. If they want to exceed the discretion limit the bank concerned must obtain the approval from ECGC.
(iii) Before the end of every month, the Bank has to submit monthly declaration along with the premium to ECGC in respect of Standard I and Standard II covering the entire pre shipment and post shipment.
(iv) The bank has to sanction and advance money to the exporter within the period of validity of the export order/letter of credit.
(v) Before according such sanction to the exporter the bank concerned must obtain the approval of the competent authority empowered to sanction.
(vi) If the amount is not repaid by the exporter to the Bank within a period of 360 days in case of pre shipment or within a period of 180 days in case of post shipment, the Bank has to obtain further approval from ECGC for getting the period extended and this is subject to the Bank concerned getting approval from its competent authority.
(vii) It is the duty of the Bank concerned to ensure that all the terms and regulations stipulated by their competent authority are strictly followed before making advance to the exporter.
(viii) If for any reason the Bank concerned is not able to follow all the terms and conditions within the time stipulated, they must obtain approval from their competent authority for further extension of time and thereafter seek approval from ECGC by setting out the 50 Spl.C.C.No.157/2001 reasons for not being able to follow the conditions within the time stipulated.
(ix) If the export could not be effected within a period of four months from the due date or extended due date as the case may be the Bank has to report the same to the ECGC.
(x) If for any reason the advances are recalled by the Bank, the same has to be intimated to the ECGC within one month from the date of recall as he remembers.
(xi) Within six months from the date of default the bank has to submit the application making claim to ECGC.
(xii) As per the terms and conditions of ECGC, the Bank has to submit all the documents along with the claim Form to ECGC. The bank is expected to take all precautions to minimize the loss that may be caused to the Bank and to ECGC.
(xiii) The Bank apart from submitting the claim Form to ECGC must proceed to take legal action against the exporter concerned for the recovery of the amount and for such other reliefs.
(xiv) If the advances made by the bank to the Exporter are already over due, the Bank cannot make further advance to the Exporter without the approval of ECGC and their competent authority.
(xv) The Bank cannot enter into any compromise with the Exporter without the knowledge and consent of ECGC.51 Spl.C.C.No.157/2001
(xvi) The ECGC maintain a list called a Specific Approval List (SAL), which contains the list of Exporters, who are defaulters to other Banks/Financial Institutions which includes the names of proprietors, directors, partners and guarantors. The bank to get the benefit from ECGC should not advance money to such defaulters.
The witness further states that during the year 1997 one Mr.D.S.Nair was the Manager of the ECGC and he worked under him for a period of 4 years. He further speaks that he is familiar with his hand writing, signatures and initials. The witness identifies the letter addressed on the letterhead of ECGC to Andhra Bank, Chamarajpet Branch, Bangalore dated 15/10/1997 which is marked as Ex.P.46. Another letter on the letterhead of ECGC addressed to the Andhra Bank, Chamarajpet Branch, Bangalore dated 20/10/1997 is marked as Ex.P.47. The witness identifies the signatures of Mr.Nair on the letters marked in Ex.P.46 and P.47.
22. P.W.8 has stated in his evidence that he was working as the General Manager (Credit) at the Head Office, Andhra Bank, Hyderabad (A.P) from the year 1995 to 1996. M/s. J.J. Fashion Studio Pvt., Ltd., had availed advances from Andhra Bank, Chamarajpet Branch, Bangalore when he 52 Spl.C.C.No.157/2001 was working in the Head Office at Hyderabad. Packing Credit Facility of Rs.30 lakhs was initially granted to M/s. J.J. Fashion Studio Pvt., Ltd., A.1 was the Br. Manager then of Chamarajpet Branch, Bangalore. The witness identifies the letter marked in Ex.P.32 addressed by A.1 as the Manager of Andhra Bank, Chamarajpet Branch, Bangalore to the Chief Manager, Zonal Office, Bangalore dt. 4/7/1995. He further speaks that A.1 had requested in the letter for confirmation of action in having a loan of PC.limits of Rs.12 lakhs for a period of 30 days, after obtaining oral permission from him. The letter also speaks that confirmation was not received till then and request is made in the letter for confirming the same. The witness speaks that by going through Ex.P.31 the Manager must have taken oral permission already from him. In case of Packing Credits which are export credits, normally banks will be very liberal. Sometimes the party applying for P.C. facility may have urgency and under such circumstances when a letter is written by the Br. Manager seeking the approval of Zonal Office, in order to avoid delay and having regard to the urgency pleaded they as an approval authority accord oral 53 Spl.C.C.No.157/2001 approval. Once such oral approval is given, it is the duty of the Br. Manager to approach the higher authorities and obtain confirmation in writing. Once a letter is written by the Br. Manager of the Bank to the higher authorities seeking confirmation of the action taken, the letter will be processed and placed before the authority concerned for confirmation. If all the requirements are properly satisfied, confirmation will be issued in writing and in case of any clarification is required, then letter will be addressed to the Branch seeking clarification of the same. The witness speaks that C.B.I. has enquired him with regard to this case and has recorded his statement also.
23. P.W.9 has stated in his evidence that during the period from Apr-1997 to May-1999 he worked as a Br. Manager of Andhra Bank, Chamarajpet Branch, Bangalore. He succeeded A.1. When he verified the accounts of M/s. J.J. Fashion Studio Pvt., Ltd., he found that it was in bad shape and amount was overdue. When he along with A.1 contacted A.2/Mr. F. Don Bosco and asked him to settle the amount due, A.2 expressed his inability to settle the loan 54 Spl.C.C.No.157/2001 amount due to financial problem and made a request for further financial accommodation from the Bank. He brought it to the notice of his higher authorities. Thereafter the Bank contacted panel Advocate of the Bank and got issued a legal notice recalling the whole loan amount sanctioned to A.2. When there was no response from the borrower, co- obligant and the guarantor, he approached his higher authorities and sought permission to initiate further action in the matter. The panel Advocate was asked to initiate legal proceedings before the DRT, Bangalore for recovery of the loan amount. Accordingly at the directions of the Zonal Office a suit was brought before the DRT, Bangalore. Thereafter a legal notice was published in the newspaper that the properties mentioned in the publication are the subject matter of the suit in the DRT proceedings and those properties would be auctioned for recovering the amount due to the Bank. The said properties were belonging to Mr.B.K.Doraiswamy and Mr. D.Martin. On seeing the newspaper publication the sureties rushed to the Bank and informed them that they did not mortgage their properties to the Bank for the loan extended to A.2. To this effect 55 Spl.C.C.No.157/2001 even the sureties sent a Notice to the Bank through their Advocate disputing the very mortgage itself. Thereafter Mr.C.V. Prasad (P.W.36) the Vigilance Officer, stationed at Bangalore Zonal Office was deputed for the purpose of conducting enquiry. He has assisted him in that regard. The witness further states that he was asked to assist the Vigilance Officer in completing the enquiry and in his presence the Vigilance Officer interrogated A.1. The Interrogation Report in 62 Sheets conducted by Mr.C.V. Prasad (P.W.36) commencing from 12/12/1997 to 6/1/1998 is marked as Ex.P.48. The witness identifies his signature found on the last Page which is marked as Ex.P.48(a). He further speaks that A.1 has signed on all the Sheets in Ex.P.48. The Vigilance Officer C.V.Prasad has also affixed his signature on the Report. He states that he having been present at the time of interrogation, he has put his signatures on all the sheets of the Interrogation Report. He further states that the C.B.I. has enquired him also and has recorded his statement.
56 Spl.C.C.No.157/2001
24. P.W.10 has stated in his evidence that he was an Officer of Andhra Bank, Chamarajpet Branch, Bangalore when the incident took place. During Apr-1997 he was shifted to Advance Department where he took charge from Mr. Ramamurthy (P.W.12). The xerox copy of register of title deeds (in two sheets) which has been certified as true copy by the Manager of the Bank is marked through the witness as Ex.P.49. Ex.P.49(a) is the signature of P.W.10. The witness states that he made entries in Ex.P.49 relating to the property documents submitted by the surety/D.Martin which were deposited with the Bank. He states that the surety/D.Martin had deposited the certified copy of the sale deed of the year 1961, registered Partition Deed, Bifurcation and transfer of khata, Khata Certificate, Tax Paid Receipts, Valuation Report and nil Encumbrance Certificate. The witness states that he has been examined in the case by the C.B.I.
25. P.W.11 has stated in his evidence that he has worked as the Br. Manager, SBI Rajajinagar Industrial Estate Branch, Bangalore from July 2000 to 2003. The letter 57 Spl.C.C.No.157/2001 written by the Bank to the C.B.I. dt. 2/5/2001 is marked as Ex.P.50. Ex.P.50(a) is the signature of P.W.11. The attesting copy of the Statement of A/c. of M/s. M.V. Enterprises certified by the Bank in five sheets is marked as Ex.P.51 which is from 16/3/1994 to 12/6/1997. Ex.P.51(a) & (b) are the signatures of P.W.11. The A/c. Opening Form of M.V. Enterprises is marked in Ex.P.52. The witness states that Mr. N. Gangadhar/A.3 is the Proprietor of M.V. Enterprises and he was operating the A/c. The witness further states that the two Pay Orders bearing Nos.322079 & 322080 both dt. 30/11/1994 for a sum of Rs.3 lakhs and Rs.1 lakh respectively were issued by Andhra Bank in favour of M.V. Enterprises and M.V. Enterprises presented these two Pay Orders for collection in their Bank. After receipt of the payment, the proceeds were credited to the A/c. of M.V. Enterprises. The Pay Orders for Rs.3 lakhs and Rs.1 lakh are marked separately as Ex.P.53 and P54. The witness states that in the Statement of A/c. in Ex.P.51 the corresponding credit entries for the above Pay Orders were given on 2/12/1994 and the corresponding debit entries could be found on 24/11/1994.
58 Spl.C.C.No.157/2001
26. P.W.12 has stated in his evidence that he was working as an Officer in Andhra Bank, Chamarajpet Branch, Bangalore during the period from Feb-1996 to June-1997 and during that time he was looking after all the advances, recoveries and obtaining stock statements from the borrowers. The 1st accused was the Manager at that time. The Debit Voucher dated 8/8/1996 for a sum of Rs.18,89,740.35 of A.2-Co., and the Credit Voucher of the said Company for the same amount are marked as Ex.P.55 & P.56 respectively. Signatures of A.1 on these documents are marked as Ex.P.55(a) & P.56(a) respectively. The witness states that the overdue export bill amount was debited to the amount of A.2 and sundry debtor's general account was credited from the account of M/s. J.J. Fashion Studio Pvt., Ltd., The witness identifies the letter handed over to the Br. Manager by Mr.Martin Dt. 4/3/1997 which is in Ex.P.8 under which he had offered certain property documents owned by him intended to secure repayment to the Bank the money due from time to time from M/s.J.J. Fashion Studio Pvt. Ltd. Even the witness identifies the signature of 59 Spl.C.C.No.157/2001 Mr.Martin on the document which is marked in Ex.P.8(a). The witness further states that he only has filled up various columns on Page Nos.1 & 2 in Ex.P.8. He further speaks that the said document was filled by him in his hand writing at the say of A.1. He further speaks that after filling up Ex.P.8 when he took the document to the Cabin of A.1, he got the signature of Mr.Martin and returned the document to him, further pointing it to the person sitting in the Cabin saying that he was Mr.Martin whose signature has been obtained on Ex.P.8. By perusing Ex.P.10 the witness speaks that certain portions in the document are written by him only and he does not know who has struck-off Rs.30 lakhs found in the said document. He even identifies another document marked for the prosecution in Ex.P.11 and states that he does not know who has made mark in green ink near the signature of Mr.Martin in the said document. He further states that after writing these documents the same were handed over to the Manager of the Bank/Accused No.1.
27. P.W.13 has stated in his evidence that he was working as the Divisional Manager, Foreign Department, 60 Spl.C.C.No.157/2001 Canara Bank, Residency Cross Road, Bangalore during the relevant period. He identifies xerox copy of the covering letter Dt. 3/11/1994 to the letter of credit which was written by the advising Bank namely the Canara Bank addressed to the beneficiary namely M/s. First Fashion Code Pvt., Ltd., Bangalore in which the issuing Bank has been shown as Union Bank of Switzerland, Zurich. This letter along with the letter of credit and others are together marked as Ex.P.57. The witness states that this letter of credit is not available for negotiation in any Bank in India and it is available for payment only at the counters of issue Bank ie., Union Bank, Zurich Branch, Switzerland. All the documents are required to be sent only to that Union Bank of Zurich branch, Switzerland for payment and that branch will verify those documents and make payment if found correct. As per the condition found in the Letter of Credit the airway bills and the combined transport documents for sea-air shipments of the consigned goods are to be sent directly to the Union Bank of Switzerland, Zurich branch. But the goods were to be sent to the third party nominated in the Letter of Credit directly and not to the importer. The importer had to 61 Spl.C.C.No.157/2001 be notified about the shipments of the goods. If this condition is not acceptable to the beneficiary they should go for getting the letter of credit amended appropriately. The witness further states that there was an arrangement between Canara Bank of India and Union Bank of Switzerland, wherein their Bank was asked to be an advising Bank for the Letter of Credit to the beneficiary / M/s. First Fashion Code Pvt. Ltd. Accordingly they have discharged their duty as an advising Bank by giving advice under the caption "CAUTION" as shown in the letter.
28. P.W.14 has stated in his evidence that he was working as Inspector of branches of Andhra Bank at Inspectorate Office, Andhra Bank, Chennai (Tamil Nadu) during the year 1995. During the months of Sep. & Oct.1995 he inspected the Andhra Bank, Chamarajpet Branch, Bangalore and at that time he inspected and verified the A/c. of M/s. J.J. Fashion Studio Pvt. Ltd. The observations made by him during the said inspection was reported to the Branch Office of Chamarajpet, Bangalore as well as the Zonal Office of Andhra Bank at Bangalore. The same was 62 Spl.C.C.No.157/2001 also reported to the Office of the Inspectorate Chennai (Tamil Nadu). The witness identifies the xerox copy of the Inspection Report dt. 15/10/1995 which is already marked in the case as Ex.P.40 (totally in 9 sheets). The witness states that the original of the Inspection Report is submitted by him to the Chamarajpet Branch, Bangalore. He states that the Report in Ex.P.40 is in his hand-writing and during the inspection of the Bank he noticed the following irregularities committed by the Br. Manager of Andhra Bank, Chamarajpet Branch, Bangalore.
1. The common seal of the Co., - M/s.JJ Fashion Studio Pvt. Ltd. not affixed on a document which was submitted by the said Co., to the bank in prescribed Form RF-210.
2. The rate of interest column in the document executed for packing credit facility was left blank.
3. Per pro stamp of the Co., was not affixed in RF-210.
4. The charge creation certificate was not obtained.
5. The law officer's certificate and necessary documents were not obtained.
6. The letter of access (RF-248), rent letter (RF-233) were not obtained.
7. A declaration with documents were not obtained from the processing units that the stocks will not be hypothecated.
63 Spl.C.C.No.157/2001
8. The stocks were not insured for full value.
9. The stock statement was not enclosed with the PC agreement.
10. The insurance of primary and collateral security was not there in record when he inspected.
11. Processing charges of Rs.5,000/- was not collected.
12. The branch was not ensuring the proper end use of funds. The PC amounts were being credited to the CD A/c.
13. The branch was allowing PC, far in excess of the sanctioned limit. Though the Br. Manager of the bank said that he had obtained permission from the competent authority for allowing excess limit such permission letter was not on record.
14. The branch was found purchasing the bills without regular sanction order and there was no record to show that such sanction was obtained from the Zonal Office.
15. The Co., was not furnishing stock statements and MS OD (Monthly Select Operational Data) regularly.
16. The branch did not obtain declaration from the manufacturing units on behalf of the Co., that they will not hypothecate stock as stipulated in sanction and certificate from the banks.
17. Branch did not obtain confirmation from the Zonal Office for allowing PCs against orders in the name of sister concern namely:- First Fashion Code Pvt. Ltd.
18. The branch was releasing PCs against orders where as the sanction specifically stipulated the condition of LC. For this branch did not obtain confirmation for deviating the sanction stipulated.
19. Five bills worth Rs.18,89,740=35 were sent for collection through NR Road branch were shown under 64 Spl.C.C.No.157/2001 "Items in transit" in the books of Chamarajpet branch and proceeds were credited to the CD account of the Company. The said bills were not realized by the NR road branch and outstanding in their books.
20. The branch disbursed post shipment duty draw back advance of Rs.2Lakhs to the Co., without prior permission from the competent authority or post confirmation of the Zonal Office.
21. The explanation offered by the branch that the TODs were allowed to collect interest were found to be not true. The branch never sought confirmation of its action from the competent authority. During the inspection the outstanding TOD amount was Rs.1,23,533=51.
The witness further states that he conducted the inspection of the unit premises accompanied by the Br. Manager and during the inspection he found that the Co., was showing a stock value of Rs.4.34 lakhs in their Stock Statement as held with M/s. SSTP Ltd., When he visited the place along with the official of the Co., the official of M/s. SSTP Ltd., refused to acknowledge stock holding on behalf of the Co., He visited M/s. UTAL where the Co., was showing stock of Rs.18 lakhs. At the time of his visit to the Co., no responsible person was present in the said Co., to confirm the holding of stock of Rs.18 lakhs of M/s. J.J. Fashion Studio Pvt. Ltd. He found that M/s.UTAL was exporting the fabrics 65 Spl.C.C.No.157/2001 on its own. Further he found that there was no name board as "Stocks hypothecated to Andhra Bank" anywhere displayed in M/s. J.J. Fashion Studio Pvt. Ltd., He also noticed that M/s. First Fashion Code Pvt. Ltd., was also carrying on its activities in the same premises where M/s. J.J. Fashion Studio Pvt. Ltd., was functioning. The xerox copies of the Stock Statements of M/s. J.J. Fashion Studio Pvt. Ltd., (in 5 sheets) for different months are marked as Ex.P.58 to P.62.
29. P.W.15 has stated in his evidence that Smt. S. Sulochana was the Proprietor of M/s. Mani Exports. About 12 years ago the said Firm was started by them. The Firm had two Bank A/cs.; one in Canara Bank and another in Vysya Bank, Gugai Branch. The Firm used to supply cotton textiles to M/s. J.J. Fashion Studio Pvt. Ltd., and had supplied cotton textiles to the tune of Rs.3 lakhs to the Co., A Cheque was issued by M/s. J.J. Fashion Studio Pvt. Ltd., towards payment to their Firm which was returned dishonoured by the Bank. However, subsequently they received a part payment of the amount due from M/s. J.J. Fashion Studio 66 Spl.C.C.No.157/2001 Pvt. Ltd., When they did not receive full payment for the cotton textiles furnished to M/s.J.J. Fashion Studio Pvt. Ltd., he had come to Bangalore and enquired with their Agent by name Mr. Natarajan. He was told by the Agent that the Proprietor of M/s.J.J.Fashion Studio Pvt. Ltd., has gone abroad. Because of non payment of money by M/s.J.J. Fashion Studio Pvt. Ltd., due to them he sustained loss in business.
30. P.W.16 has stated in his evidence that he has been doing business in Towels since last 15 years under the name of A.P.Srinivas. He had entered into business transaction with Mr. F. Don Bosco / Proprietor of M/s. First Fashion Code Pvt. Ltd., and did business with him for two years in between 1994-95. The Proprietor of M/s. First Fashion Code Pvt. Ltd., used to supply towels to them for the purpose of dyeing and after the process of dyeing was done, they used to return the towels to M/s. First Fashion Code Pvt. Ltd., They used to claim labour charges and prepare bill and send the same along with dyed fabric for which Mr. F. Don Bosco used to make payment through D.D. Towards the same he 67 Spl.C.C.No.157/2001 has received a sum of Rs.2 lakhs through D.D. from Mr. F. Don Bosco. The four D.Ds dt. 13/11/1994 for Rs.50,000/-, dt. 5/12/1994 for Rs.50,000/-, dt.5/1/1995 for Rs.50,000/-, dt. 7/3/1995 for Rs.1,50,000/- favouring A.P. Srinivas are marked as Ex.P.63 to P66.
31. P.W.17 has stated in his evidence that he and his two brothers were carrying on business in the name of Palani Swamy Goundar, which was closed by them about 12 years ago. They were carrying on textile business with M/s. J.J. Fashion Studio Pvt. Ltd., during the year 1995. They had transacted with M/s. J.J. Fashion Studio Pvt. Ltd., for about six months during which they might have done 2 - 3 business transactions. They used to receive payments from them either by Cheque or D.D. They might have transacted with M/s. J.J. Fashion Studio Pvt. Ltd., about worth Rs.6 to 7 lakhs. They had maintained an A/c. in Tamil Nadu Mercantile Bank, Erode. For the business transacted with M/s. J.J. Fashion Studio Pvt. Ltd., they had received a D.D. dt. 18/7/1995 for a sum of Rs.1 lakh. However, the Proprietor of M/s.J.J.Fashion Studio Pvt. Ltd., did not make full payment of the money due to them and inspite of best 68 Spl.C.C.No.157/2001 efforts to recover the entire balance due to them, they did not recover the money from the Proprietor of M/s. J.J. Fashion Studio Pvt. Ltd. Still he is due certain amount to them.
32. P.W.18 has stated in his evidence that he was a Weaver as well as Trader in textiles and his establishment name is M/s. V. Krishnan & Co., He knows Mr. F. Don Bosco, who is the Proprietor of M/s. First Fashion Code Pvt. Ltd., He had business with him and had supplied fabric to him during the year 1994. He has done business with him for about Rs.7 to 8 lakhs. Within 30 days from the date of supply of fabric, Mr. F. Don Bosco used to make payment to him through D.D. The witness identifies the three D.Ds favouring M/s. V. Krishnan & Co., Dt. 30/11/1994 for Rs.2 lakhs, Dt. 3/1/1995 for Rs.1 lakh and Dt. 18/7/1995 for Rs.1 lakh which are marked in Ex.P.68 to P.70 respectively. Except these payments no other payment was made by Mr. F. Don Bosco and though on several occasions he went to the premises of M/s. First Fashion Code Pvt. Ltd., and asked to 69 Spl.C.C.No.157/2001 settle the balance amount, there was no proper response from the Proprietor of the said Firm.
33. P.W.19 has deposed in his evidence that he is an Auditor and Tax Consultant and he has maintained a Current A/c. with Andhra Bank, Chamarajpet Branch, Bangalore. He had the said A/c. from 1992 to 2007. He is maintaining a S.B A/c. also in the said Bank. He knows A.1 who was the Manager of Andhra Bank, Chamarajpet Branch, Bangalore then. He was having Cheque discount facility of the Current A/c. held by him with the said Branch. The Current A/c. Opening Form in the name of M/s. J.J. Fashion Studio Pvt. Ltd., in Andhra Bank, Chamarajpet Branch, Bangalore is marked as Ex.P.71. He introduced the A/c. holders to the Bank and he has signed as introducer in Ex.P.71(a). The witness speaks that he was not knowing M/s. J.J. Fashion Studio Pvt. Ltd., On that day when he had been to the Bank for getting the Cheques discounted, on the request made by the Br. Manager (A.1) of the Bank he has signed on the A/c. Opening Application in Ex.P.71(a) for opening the Current A/c. by M/s. J.J. Fashion Studio Pvt. Ltd., as an introducer. 70 Spl.C.C.No.157/2001 The Br. Manager informed him that the person opening the Current A/c. is one of his best friend and believing the words of the Br. Manager (A.1), in good faith he subscribed his signature at Ex.P.71(a).
34. P.W.20 has stated in his evidence that he is working in M/s. Srinivasa Textile Processors Pvt. Ltd., since last 17 years. The nature of his work was relating to dyeing and printing all the fabrics provided by the customers according to their requirements. The witness states that he has handed over the attested copies of the Stock Statement (in 3 sheets) now he is seeing in Ex.P.72 to the C.B.I. and it pertains to the year 1995-96 which is belonging to M/s. First Fashion Code Pvt. Ltd., Another Stock Statement of M/s. J.J. Fashion Studio Pvt. Ltd., is marked through the witness as Ex.P.73. The witness further speaks that when the Bank inspected the stocks in their Co., during the year 1995, the stocks of either M/s. J.J. Fashion Studio Pvt. Ltd., or M/s. First Fashion Code Pvt. Ltd., were not available to the extent of value mentioned in Ex.P.72 and P.73. 71 Spl.C.C.No.157/2001
35. P.W.21 has stated in his evidence that he is the Proprietor of M/s. S.M. Fabrics, Pallipalyam, Namakal District, Tamilnadu (TN), doing business in textile since last 30 years. He had business transaction with M/s. J.J. Fashion Studio Pvt. Ltd., and also M/s. 2-B Fashion Pvt. Ltd., situated at Lalbagh Cross Road, Bangalore during the years 1994-1997. He might have done business with them to the tune of Rs.30 to 40 lakhs. They used to make payments through D.Ds. When he came to Bangalore to collect the dues outstanding from them and made efforts to trace them, it was of no avail. The D.Ds of various dates under which M/s. J.J. Fashion Studio Pvt. Ltd., made payments to M/s. S.M. Fabrics have been marked through the witness as Ex.P.74 to P.81.
36. P.W.22 has deposed in his evidence that he is in textile business in the name of Miduna Fabrics since past 25 years and he used to have business dealing with M/s. First Fashion Code Pvt. Ltd., during the year 1995-96. He sold fabrics worth Rs.4,40,000/- to M/s. First Fashion Code Pvt. Ltd. M/s. First Fashion Code Pvt. Ltd., has made payments 72 Spl.C.C.No.157/2001 twice by D.D. of Rs.1 lakh each and the said D.Ds are marked as Ex.P.82 and P.83. The witness further states that M/s. First Fashion Code Pvt. Ltd., is still due an amount of Rs.1,04,734-40 to him. Though he made sincere efforts to trace the concerned for realization of the dues it was of no avail.
37. P.W.23 has deposed in his evidence that M/s. Palyam Textiles was established in the year 1985 by his elder brother by name P.Nagalingeshwara. He joined subsequently. Their main business is accepting job works like dyeing, bleaching, washing etc., for Garment Exporters. They had business with M/s.J.J.Fashion Studio Pvt. Ltd., and M/s. 2-B Fashion Code during the years 1990 to 1995. The xerox copy of the Debtor's Register Extract (in 3 sheets) pertaining to M/s. J.J. Fashion Studio Pvt. Ltd., and M/s. 2- B Fashion Code for the year 1995-96 is marked through the witness as Ex.P.84 and the signature of the witness is marked as Ex.P.84(a). A xerox copy of the Invoice cum Gate Pass certified by the witness is marked as Ex.P.85 which disclose the processing work done, including labour charges by M/s. 73 Spl.C.C.No.157/2001 Palyam Textiles on the fabrics supplied by M/s. J.J. Fashion Studio Pvt. Ltd.
38. P.W.24 has stated in his evidence that since 1978 he is a practicing Advocate at Bangalore. He was one of the Panel Advocates during the years 1995 to 2009. He identifies the Letter addressed by him to the C.B.I Dt.13.08.2001 which is marked as per Ex.P.86. Ex.P.86(a) is the signature of P.W.24. Carbon copy of the legal opinion submitted pertaining to this case to Andhra Bank Dt.11.02.1997 is marked as Ex.P.87. Witness states that he furnished the Legal Opinion pertaining to the property offered to the Bank owned by one Martin.
39. P.W.25 has stated in his evidence that he has worked as Senior Manager, Canara Bank, Coxtown Branch, Bangalore during the year 2001. On the request of the C.B.I., when they examined him, along with a letter now he is seeing Dt.18/7/2001 he has furnished the extract of the A/c. of Mr. D. Martin bearing A/c. No.720 attested by him. The letter addressed by the witness to the C.B.I. is marked in Ex.P.88 and signature of the witness is marked as 74 Spl.C.C.No.157/2001 Ex.P.88(a). True extract of the A/c. held by Mr. D. Martin with the Bank is marked as Ex.P.89 and signature of the witness is marked as Ex.P.89(a). The witness states that on going through Ex.P.89 it can be found that an amount of Rs.2,35,000/- was credited to the A/c. of Mr. D. Martin through Cheque bearing No.338038 on 29/3/1997.
40. P.W.26 has stated in his evidence that during Feb. 1996 to Oct. 1997 he has worked as an Officer in Andhra Bank, Chamarajpet Branch, Bangalore. Current A/c. No.972 in the said Bank was held by M/s. J.J. Fashion Studio Pvt. Ltd., The witness speaks that on going through the extract of the Current A/c. held by M/s. J.J. Fashion Studio Pvt. Ltd., marked in Ex.P.43, though there is provision with respect to writing special instruction for caution, no instructions relating to P.C. advance could be found at the bottom of the extract. He further speaks that the letter of guarantee marked in Ex.P.9 was written by him at the dictation of the Br. Manager in the Manager's Cabin and at that time the person who had signed the document was not present in the Manager's Cabin. He further states that when the stamp 75 Spl.C.C.No.157/2001 paper was given to him for writing, it was blank having the signature of the person signed at Ex.P.9(a).
41. P.W.27 has stated in his evidence that he has been doing business in Textiles since past 25 years. M/s. Art Exports and M/s. Sree Sudarshan Text are the Partnership Firms of which he is one the Partner. Both the Firms are not in existence now. M/s. Art Exports was being managed by himself and one Mrs. Ananda Nayagi. M/s. Sree Sudarshan Text was managed by himself and one Mr. Sampath Kumar. Both these Firms were supplying Garments to M/s. J.J. Fashion Studio Pvt. Ltd., at Bangalore for a period of about 1½ years. Mr. F. Don Bosco was managing the said Firm. The two Partnership Firms might have supplied Garments worth Rs.30 to 32 lakhs to M/s. J.J. Fashion Studio Pvt. Ltd., M/s. J.J. Fashion Studio Pvt. Ltd., was making payment either in the form of Cheque, D.D. or sometimes in cash also. M/s. J.J. Fashion Studio Pvt. Ltd., is still due a sum of Rs.7 to 8 lakhs to them. The witness identifies the three D.Ds marked in Ex.P.90 to P.92 favouring M/s. Art Exports for a sum of Rs.2 lakhs, Rs.1 lakh; and Rs.1,50,000/-. The witness 76 Spl.C.C.No.157/2001 further speaks that one Mr. Natarajan had introduced Mr. F. Don Bosco to them and though they made sincere efforts through Mr. Natarajan to recover the balance amount many a times, they did not succeed. It was told to them that Mr. F. Don Bosco has suffered heavy loss in the business and has absconded. Still they are due balance amount from Mr. F. Don Bosco.
42. P.W.28 has stated in his evidence that during the years 1994 to 1997 he has worked as an Inspector of Andhra Bank Branches. During Oct.1996 he was asked to inspect Andhra Bank, Chamarajpet Branch, Bangalore and during the inspection when he inspected the A/c. of M/s. J.J. Fashion Studio Pvt. Ltd., he found certain irregularities. He has submitted a Report to the Regional Inspectorate regarding the A/c. of M/s. J.J. Fashion Studio Pvt. Ltd., pointing out the irregularities noticed by him. A xerox copy of the Report submitted by the witness to the Regional Inspectorate is marked as Ex.P.93. He further speaks that certain irregularities were pointed out in respect of M/s.J.J. Fashion Studio Pvt. Ltd., in the previous Inspection Report also which 77 Spl.C.C.No.157/2001 was conducted by some other Officer of the Bank. When he perused the previous Inspection Report, while inspecting the Branch, he found that the defects that were pointed out in the previous Inspection Report were not at all corrected by the branch till then. The defects which were noted by him during the inspection of the said Branch in respect of the Current A/c. held by M/s. J.J. Fashion Studio Pvt. Ltd., are as below.
1. The export bills amount to the tune of Rs.18.89 lakhs were debited to the Sundry Debtors A/c. of the Bank.
2. The branch had allowed temporary overdraft facility to the A/c. of M/s.JJ Fashion Studio Pvt. Ltd. and the same was not reported to the higher authorities.
3. Law Officer's certificate was not obtained by the branch to satisfy with regard to the enforceability of the documents furnished by M/s.JJ Fashion Studio Pvt. Ltd.
4. The branch did not had the collateral security offered by M/s.JJ Fashion Studio Pvt. Ltd. duly insured.
5. Monthly stock statements were not obtained by the branch from M/s.JJ Fashion Studio Pvt. Ltd.
6. There was an outstanding liability on the credit card, which was issued by the branch in favour of M/s.JJ Fashion Studio Pvt. Ltd.
7. One Bank Guarantee was issued and closed without reporting the same to the higher authorities. 78 Spl.C.C.No.157/2001 8, The Br. Manager exceeded in his power while sanctioning credit facilities to M/s.JJ Fashion Studio Pvt. Ltd., and did not report the same to the higher authorities.
9. He also noticed that certain documents of M/s.JJ Fashion Studio Pvt. Ltd. were blank.
The witness states that he has signed on all six sheets of his Report in Ex.P.93.
43. P.W.29 has stated in his evidence that he is a practicing Chartered Accountant since the year 1989 and he is one of the Partner of the Chartered Accountant Firm by name M/s. ARUN & BALU. They are the Concurrent Auditors of Andhra Bank, Chamarajpet Branch, Bangalore. On 5/6/1996 they had been to M/s. J.J. Fashion Studio Pvt. Ltd., to inspect the stock. At the time of inspecting the stock they had carried a copy of the stock statement furnished to the Bank by M/s. J.J. Fashion Studio Pvt. Ltd., and after inspecting the premises they prepared a detailed Report and submitted the same to the Bank. The Inspection Report of the Auditor (in 9 sheets) is marked as Ex.P.94. Signature of the witness on the last page is marked as Ex.P.94(a). The covering letter along with the Report is 79 Spl.C.C.No.157/2001 marked as Ex.P.95 and signature of the witness is marked as Ex.P.95(a). The defects noticed during the inspection of M/s. J.J. Fashion Studio Pvt. Ltd., have been mentioned in detail in Ex.P.94.
44. P.W.30 has stated in his evidence that he was one of the Panel Advocate of Andhra Bank during the year 1994. He speaks with respect to the property owned by one Sri.B.K.Doraiswamy. He has furnished the legal opinion to the Bank as per Ex.P.96 Dt.29.11.1994. He states that at the time of giving legal opinion to the Bank even he has gone through the Power of Attorney in Ex.P.3. While offering the Legal opinion he has referred to the Title Deeds of the owner/B.K.Doraiswamy and the same have been listed in the Legal opinion furnished to the Bank in Ex.P.96. The letter addressed by P.W.30 to the CBI Dt.24.05.2001 is marked in Ex.P.97. Ex.P.97(a) is the signature of P.W.30. He speaks that he had addressed Ex.P.97 to the CBI with regard to the clarification found in the Power of Attorney/Ex.P.3.
45. P.W.31 has stated in his evidence that during the year 1999 he was working as the A.G.M. (Vigilance 80 Spl.C.C.No.157/2001 Department), Andhra Bank, Head Quarters, Hyderabad. He has lodged a written complaint with the CBI in the case against A.1 and others. It was with regard to the allegations of exceeding the sanction limits and releasing the funds and also releasing the funds without obtaining the sanction, etc. The complaint lodged with the CBI by P.W.31 Dt. 29.09.1999 is marked as Ex.P.98 and the signature of P.W.31 is marked as Ex.P.98(a).
46. P.W.33 has stated in her evidence that she was working as Departmental Officer in Andhra Bank, Chamarajpet Branch, Bangalore, from July 1993 to May 1999. Even she was incharge of the Savings Bank Dept. till she was placed incharge of the Current A/c. Dept. She further states that in the case of opening of Current A/c. by a party it is required to be authenticated by the Br. Manager and thereafter it goes to the Cash Dept. for remittance of the amount; thereafter along with the duly filled application for the opening of the Current A/c. it will come to the Current A/c. Dept. where a current A/c. will be opened in the name of the Applicant. She states that at the time of the incident 81 Spl.C.C.No.157/2001 A.1 was the Br. Manager. In the Bank there was a Current A/c. in the name of M/s.J.J.Fashion Studio Pvt.Ltd. She identifies that the Pay-in-slip dt.29.11.1994 under which M/s.J.J.Fashion Studio Pvt.Ltd. has made an initial deposit of Rs.1,001/- at the time of opening the Current A/c. is in Ex.P.100. She states that she has signed on the Pay-in-slip in Ex.P.100(a). She further speaks that in respect of the Current A/c. if the Cheque drawn and presented to the Bank for encashment is for Rs.25,000/- and above, it is required to be countersigned by the 2nd Officer. In case of transfer of a Cheque for transfer of cash from one A/c. to another A/c., signature by the 2nd Officer is needed if the value of the Cheque is Rs.50,000/- or above. If the value of the Cheque is Rs.25,000/- or less, the concerned Departmental Officer himself/herself can pass such a Cheque for payment. Cheque bearing No.079651 Dt.30.11.1994 drawn by M/s.J.J.Fashion Studio Pvt.Ltd. for a sum of Rs.11,51,150/- is marked as Ex.P.101. By going through the Ledger Sheets of M/s.J.J.Fashion Studio Pvt.Ltd. bearing Current A/c. No.972, witness states that the total amount of withdrawals on self Cheques from 22.02.1995 to 30.09.1995 comes to 82 Spl.C.C.No.157/2001 Rs.11,65,000/-. She further states that on perusal of the Ledger sheets it shows that withdrawals made by the A/c. holder of the A/c. by issuing self Cheques Dt.16.05.1996 for Rs.1 Lakh, Dt.18.05.1996 for Rs.25,000/-, Dt.22.05.1996 for Rs.10,000/-, and Dt.22.05.1996 for Rs.5,000/-. She even identifies the signature of A.1 on the Pay-in-slip on the A/c. opening Form which is marked as Ex.P.100(b). She states that whenever a Partnership Firm having A/c.in the Bank converts it to a Pvt. Ltd. Company, procedure that they follow is that the A/c. opened in the name of the Partnership Firm will be closed and a New A/c. in the name of the new floated Company will be opened.
47. P.W.34 has stated in her evidence that she was working as Sub-Manager, Andhra Bank, Chamarajpet Branch, Bangalore from Aug. 1993 to May 1996. M/s.J.J.Fashion Studio Pvt.Ltd., was holding the Account in the said Branch and it was operated by Mr.F.Don Bosco. At that time, A.1 was the Manager of the Bank. She further speaks that A.2 was holding the Current A/c. No.CD-972 in the Branch. Master Sheet of the Current A/c. No.CD-972 pertaining to A.2 83 Spl.C.C.No.157/2001 is marked as Ex.P.43. Witness states that the A/c was opened on 29.11.1994. The Ledger Sheets of the Current A/c.No.CD-972 are the part of Master sheet-Ex.P.43. Witness identifies the Cheque No.079653 and 079666 both Dt.05.01.1995 drawn for a sum of Rs.50,000/- and Rs.75,000/- respectively issued by M/s.J.J.Fashion Studio Pvt.Ltd. which are marked in Ex.P.102 & 103. Three self Cheques issued by M/s.J.J.Fashion Studio Pvt.Ltd., bearing Nos.174352 Dt.26.05.1995 for Rs.20,000/-, No.174356 Dt.29.05.1995 for Rs.30,000/- & No.174358 Dt.30.05.1995 for Rs.80,000/- are marked through the witness as per Ex.P.104 to 106 respectively. Witness states that the Cheques in Ex.P.102 to 106 were passed by her only. Witness further speaks that the loan granted to the customer under the Packing Credit would be permitted to be withdrawn only for business requirements. She speaks that M/s.J.J.Fashion Studio Pvt.Ltd., issued A/c. Payee Cheque bearing No.079654 Dt.02.12.1994 for a sum of Rs.3,00,250/- for issuance of a D.D. for Rs.1,00,000/- in favour of Sri.Mangala International, Tirupur and a Pay Order for a sum of Rs.2,00,000/- in favour of M/s.First Fashion Code Pvt. Ltd. The Cheque for 84 Spl.C.C.No.157/2001 Rs.3,00,250/- Dt.02.12.1994 is marked as Ex.P.107 and the two Applications given for issuances of DD and Pay Order are marked in Ex.P.108 and 109. Debit Voucher Dt.26.05.1995 for having debited Packing Credit A/c. with Rs.5,00,000/- and also corresponding Credit Voucher Dt.26.05.1995 for having credited to the Current A/c. No. CD-972 held by A.2 for Rs.5,00,000/- are marked as Ex.P.110 & 111 respectively. The corresponding credit entry for Rs.5,00,000/- of M/s.J.J.Fashion Studio Pvt.Ltd., in the Ledger Sheet is marked as Ex.P.43(a). Debit Voucher Dt.29.05.1995 for having debited the P.C. A/c. of A.2 with Rs.12,00,000/- and the Credit Voucher for having credited to the Current A/c. of A.2 are marked as Ex.P.112 & 113 respectively. The corresponding credit entries in Ex.P.43 Dt.30.05.1995 with Rs.12,00,000/-is marked in Ex.P.43(b). Witness states that 'BRS' means 'Bills Realisation Suspense Account' and she has no power to debit the BRS A/c. unless otherwise to do so. The authorization could be by way of an oral instruction given by the Manager not necessarily in writing. Debit Voucher Dt.10.03.1995, 11.03.1995 and 20.03.1995 for a sum of Rs.2,50,000/-, Rs.5,35,000/- and Rs.3,55,400/- were 85 Spl.C.C.No.157/2001 prepared by her only at the instructions given by the Branch Manger and she has deducted these amounts to BRS amount and credited the same to the Current A/c. No. CD-972. The said Vouchers are marked in Ex.P.114 to 116 respectively. Debit voucher Dt.22.03.1995 for a sum of Rs.5,70,000/- was credited by her at the instructions of the Manger to the Current A/c. No. CD-972 which is marked in Ex.P.117. Debit Voucher Dt.19.04.1995 for a sum of Rs.6,14,384.35 Ps. which is the total of four bills is credited by her to the Current A/c. No. CD-972 as per the instructions of the Branch Manger which is marked in Ex.P.118. Debit voucher Dt. 10.05.1995 for Rs.11,00,000/- is marked in Ex.P.119 and the witness states that as per the instructions of the Br. Manager she credited this amount to the Current A/c. No. CD-972. Witness also states that when the BRS A/c. debited, it is the duty of the Manger to ascertain whether or not the Bill has been realized. She also speaks that when the instructions are received by the Manager to credit the Current A/c. with the amount of a particular Bill, if by then the sanctioned limit is already over, they inform the same to the Br. Manager and then the Manager would tell them that he obtained 86 Spl.C.C.No.157/2001 permission form his higher-ups and authorises them to credit the amount. Same has been done here also. Foreign Documentary Bills Register of Andhra Bank, Chamarajpet Branch, Bangalore is marked as Ex.P.120. Entry Dt.22.06.1995 at Page No.5 for Rs.10,21,875, Dt. 17.07.1995 at Page No.6 for Rs15,07,907.20, Dt.28.07.1995 at Page No.8 for Rs.22,382.70 and Dt.31.07.1995 at Page No.9 for Rs.9,36,823.70 are in her handwriting and the said entries are marked as per Ex.P.120(a) to 120(d) respectively. Witness states that she made these entries as per the instructions given by the Br. Manager. She has not allowed any Packing credit against the Orders. It is only the Br. Manager who allows such Packing credits. Witness further states that she visited M/s.J.J.Fashion Studio Pvt.Ltd. and she did not see the Board indicating Hypothecation of the Goods to the Bank anywhere in the premises.
48. P.W.35 has stated in his evidence that during the years 1992 to 1997 he was working in Andhra Bank, N.R.Road Branch, Bangalore and he was looking after the Foreign Exchange Department in the said Branch. N.R.Road Branch 87 Spl.C.C.No.157/2001 was categorized as 'B' Category Branch and was authorised to deal in Foreign Exchange. As such, they were getting Foreign Bills from all the Branches of Andhra Bank in the State. Witness further speaks that on receipt of the Foreign Bills he used to send it to the Payee Bank for collection. They were purchasing such Bills only when authorised by the Chief Manager of their Branch with his sanction limits. Even A.G.M of the Zonal Office was having power to authorise in respect of the Bills from other Branches of Andhra Bank in the State. He has been enquired by the C.B.I in the case with respect to the Account of M/s.J.J.Fashion Studio Pvt.Ltd. The attested copies of the Foreign Documentary Bills Register pertaining to the transaction of A.2 (8 in nos.) are marked through the witness as per Ex.P.121 to 128. It is further stated by the witness that the Originals of Ex.P.121 to 128 are maintained in Foreign Exchange Department, N.R.Road Branch, Bangalore. He further speaks that all the Foreign Bills received in the Bank will be arranged in a chronological order of the particular year. If the Bills so received are sent for collection it will be denoted by alphabet 'C' and if the Bills so received are purchased then 88 Spl.C.C.No.157/2001 it will be denoted by alphabet 'P'. Witness by going through the Foreign Documentary Bills Register marked in Ex.P.120 states that the corresponding entry in respect of copy of the Bill marked in Ex.P.124 is found. He also admits that in Ex.P.123/Copy of the Bill is also found on the right top corner of Ex.P.124. The total value of Ex.P.121 was Swiss Franks (SFR) 5,875.40 which was equivalent to Indian currency of Rs.1,60,390/-. The Union Bank of Switzerland was the drawee Bank. The relevant details of the Bill are shown in Ex.P.125. Witness identifies the copy of the Foreign Exchange Bill Dt. 21.03.1995 numbered as 'C-337075' which is marked as Ex.P.130. The corresponding entry in respect of this bill is found in Ex.P.124. The total value of Ex.P.130 was Swiss Franks (SFR) 7,433.75 which was equivalent to Indian currency of Rs.2,02,793/-. The Union Bank of Switzerland was the drawee Bank. The relevant details of the Bill are shown in Ex.P.124. The Foreign Exchange Bill of the Bank Dt.23.03.1995 is marked as Ex.P.131. The corresponding entry in respect of this Bill is marked in Ex.P.125. The said document was numbered as 'C-337079' which is entered on the right corner of Ex.P.125. The total value of Ex.P.131 was 89 Spl.C.C.No.157/2001 Swiss Franks (SFR) 21,398.50 which was equivalent to Indian currency of Rs.5,83,751/-. The Union Bank of Switzerland was the drawee Bank. The relevant details of the Bill are shown in Ex.P.125. The Foreign Exchange Bill received in the Bank Dt.08.04.1995 is marked as Ex.P.132. The corresponding entry in respect of this Bill is found in the copy of the Bill, marked in Ex.P.126. The said document was numbered as 'C-337098' which is entered on the right corner of Ex.P.126. The total value of Ex.P.132 was Swiss Franks (SFR) 8,028.00 which was equivalent to Indian currency of Rs.53,226/-. The Union Bank of Switzerland was the drawee Bank. The relevant details of the Bill are shown in Ex.P.126. The Foreign Exchange Bill received in the Bank Dt.20.04.1995 is marked as Ex.P.133. The corresponding entry in respect of this Bill is marked in Ex.P.126. The said document was numbered as 'C-337111' which is entered on the right corner of Ex.P.126. The total value of Ex.P.133 was Swiss Franks (SFR) 5,340.00 which was equivalent to Indian currency of Rs.35,511/-. The Union Bank of Switzerland was the drawee Bank. The relevant details of the Bill are shown in Ex.P.126. The Foreign Exchange Bill of the Bank Dt.26.04.1995 is 90 Spl.C.C.No.157/2001 marked as Ex.P.134. The corresponding entry in respect of this Bill is marked in Ex.P.127. The said document was numbered as 'C-337116' which is entered on the right corner of Ex.P.127. The total value of Ex.P.134 was Swiss Franks (SFR) 22,601.25 which was equivalent to Indian currency of Rs.6,32,383/-. The Union Bank of Switzerland was the drawee Bank. The relevant details of the Bill are shown in Ex.P.127. Witness further states that these Bills marked in Ex.P.129 to P.134 which were sent for collection have been returned unrealized. He further speaks that when the Foreign Bills are sent for collection from the concerned Andhra Bank, Chamarajpet Branch in this case to N.R.Road Branch of Andhra Bank, Chamarajpet Branch can give credit to the account of the concerned account holder only on receipt of Credit Advice from N.R.Road Branch. In this case, he came to know that the Manager of Chamarajapet Branch, Bangalore (A.1) was giving credit to the account of the concerned account holder (A.2) even before the Bills were sent to N.R.Road Branch of Andhra Bank, Bangalore for collection and also allowing the party to withdraw the 91 Spl.C.C.No.157/2001 amount. Witness states that his statement has been recorded by the CBI in the case.
49. P.W.36 has stated in his evidence that from the year 1999 till his retirement he has worked as the Chief Vigilance Officer, Andhra Bank, Housing Finance, Hyderabad (A.P). He has worked as a Vigilance Officer in Andhra Bank, Zonal Office, Bangalore during the period from 1995 to 1999. He knows M/s. J.J. Fashion Studio Pvt., Ltd., As the loan A/c. of M/s. J.J. Fashion Studio Pvt., Ltd., maintained with Andhra Bank, Chamarajpet Branch, Bangalore was not in order he was asked to investigate into that aspect. He conducted investigation and submitted Report on 7/2/1998. The file containing the investigation report submitted by the witness is marked as Ex.P.135. Ex.P.135 contains the main Report which is mentioned by him as File No.I. The Report submitted by him to the A.G.M. Andhra Bank, Vigilance Department, Head Office, Hyderabad (A.P) dt. 7/2/1998 bears his signature and it is in the second sheet of File No.I. His signature there is marked as Ex.P.135(a). The witness further states that another File No.II-Part(i) (reporting) was 92 Spl.C.C.No.157/2001 also submitted along with Ex.P.135 which is marked as Ex.P.136. The signature of the witness on the last page of the Interrogation Report is marked as Ex.P.48(b). The witness speaks that the borrower - M/s. J.J. Fashion Studio Pvt., Ltd., belonged to one family. The sister concern - M/s. Premium Fashion Code belonged to one Mr. F. Don Bosco - the Proprietor, which was banking with Federal Bank Ltd., Gandhinagar Branch, Bangalore. Another sister concern namely M/s. First Fashion Code Pvt., Ltd., was belonged to Mr. F. Don Bosco and his wife. They were the Directors of the Co., and banking with Catholic Syrian Bank Ltd., Gandhinagar Branch, Bangalore. They were enjoying the credit limits of Packing Credit and Foreign Bills Purchase limits. The Directors of M/s. J.J. Fashion Studio Pvt., Ltd., were Mr. F. Don Bosco and his parents - Mr. Manual Joseph and Smt. Jayamani Joseph. A.1 being the Br. Manager of Andhra Bank, Chamarajpet Branch, Bangalore, submitted a proposal for sanction of Packing Credit Limit (PCL) and Bills Purchase Limit of Rs.60 lakhs each for immediate sanction of PCL of Rs.40 lakhs. He approached the Zonal Office with request for immediate sanction of Rs.20 lakhs. As on that 93 Spl.C.C.No.157/2001 date M/s. J.J. Fashion Studio Pvt., Ltd., did not had any A/c. with Andhra Bank, Chamarajpet Branch, Bangalore. The proposal of A.1/Br. Manager of Andhra Bank to the Zonal Office is in Ex.P.16, the Process Note maintained in the Zonal Office is in Ex.P.17 and the letter of sanction of the PCL of Rs.20 lakhs as one time limit dt. 22/11/1994 is in Ex.P.18. The witness further speaks that on 29/11/1994 a Current A/c. was opened in Andhra Bank, Chamarajpet Branch, Bangalore in the name of M/s. J.J. Fashion Studio Pvt., Ltd., with an initial deposit of Rs.1,001/-. The Current A/c. opening Form is in Ex.P.71 and the challan for having deposited Rs.1,001/- with the Bank is in Ex.P.100. On 30/12/1994 A.1 again sent a proposal to the Zonal Office recommending for the sanction of PCL of Rs.10 lakhs which was also sanctioned by the Zonal Office on the very day as one time limit. Ex.P.19 dt.30/12/1994 is a proposal to the Zonal Office sent by A.1 recommending for the sanction of PCL of Rs.10 lakhs and the order dt.30/12/1994 issued by the Zonal Office sanctioning the PCL of Rs.10 lakhs is in Ex.P.20. On 2/3/1995 A.1 recommended to the Zonal Office for conversion of the above said PCLs of Rs.30 lakhs (Rs.20 lakhs 94 Spl.C.C.No.157/2001 + Rs.10 lakhs) which were sanctioned as one time limit as a regular limit. The said letter of recommendation is in Ex.P.21. On 8/3/1995 the Zonal Office accorded sanction to convert that one time PCL of Rs.20 lakhs + Rs.10 lakhs into regular limit as per the letter dt. 8/3/1995 marked in Ex.P.22. The witness further states that on 30/5/1995 A.1 allowed an ad-hoc packing credit of Rs.12 lakhs. He wrote a letter dt. 1/6/1995 marked in Ex.P.29 to the Zonal Office stating that he had taken oral permission from the General Manager to allow the P.C. The said Packing Credit Facility was only for a period of 30 days. Since all the required information was not furnished by A.1 to the Zonal Office/Head Office, oral permission was not confirmed. Further on 30/8/1995 A.1 himself had allowed a further packing credit of Rs.5 lakhs to M/s. J.J. Fashion Studio Pvt., Ltd., thus taking overall limit to about Rs.47 lakhs. The Zonal Office had earlier sanctioned packing credit limit up to Rs.30 lakhs only, that to against Foreign Letters of Credit (FLC) only, whereas A.1 allowed four packing credits, in all amounting to Rs.29.52 lakhs in between 18/7/1995 to 30/8/1995 only against the copies of orders and not FLCs. 95 Spl.C.C.No.157/2001 The same has been narrated by him in his Investigation Report/Ex.P.135 on page Nos.29 & 35. In so far as Foreign Bills Purchase, the Zonal Office had permitted A.1 to discount three bills of M/s. J.J. Fashion Studio Pvt., Ltd., through Andhra Bank, N.R.Road Branch, Bangalore through Telex Messages marked in Ex.P.24 to P.26. That was because Andhra Bank, Chamarajpet Branch was not authorized to deal in Foreign Exchange at that point of time. Subsequently A.1 started sending the foreign bills for collection to N.R.Road Branch. In the case on hand totally 9 foreign bills of M/s. J.J. Fashion Studio Pvt., Ltd., were sent by A.1 to the N.R.Road Branch for collection. However even before sending these bills for collection to N.R.Road Branch, A.1 had credited the party's A/c. by debiting the BRS A/c. and thus allowed M/s.J.J.Fashion Studio Pvt., Ltd., to enjoy the funds of the Bank. Out of these 9 foreign bills, the amounts were not at all collected by the N.R.Road Branch in respect of 5 bills. As such the act of A.1 in debiting the BRS A/c. was totally improper and a grave mistake. The details of these 9 bills are stated by him in page No.79 of his report in Ex.P.135. At page Nos.82 and 83 of the report in Ex.P.135 96 Spl.C.C.No.157/2001 he has furnished the details of all the bills purchased/sent for collection by A.1 and the result of those bills. From page Nos.88 to 94 of Ex.P.135 the full details of the daily statement of overall liabilities of M/s.J.J.Fashion Studio Pvt., Ltd., are found. The Br. Manager/A.1 then had no power to extend such facilities to M/s. J.J. Fashion Studio Pvt., Ltd., Even the Br. Manager/A.1 had not obtained confirmation from the Zonal Office for having extended such facilities. His report and the statements reveal as to how the liability of M/s. J.J. Fashion Studio Pvt., Ltd., had escalated from the sanction limit of Rs.30 lakhs to more than Rs.83 lakhs. Further M/s. J.J. Fashion Studio Pvt., Ltd., was only a Merchant Exporter. The said Co., did not had the manufacturing units of its own. Under these circumstances, the Manager of the Bank/A.1 was required to take due care and caution to see that packing credit advance is well secured with the adequate value of the goods to be hypothecated. This demands the insisting for adequate collateral security in the form of immovable property. However, in the case on hand the immovable properties furnished as collateral security belonged to third parties 97 Spl.C.C.No.157/2001 which landed up in litigation. As per the Scheme the packing credit advances were required to be adjusted only from out of the proceeds of the bills and not otherwise. The huge amount outstanding from M/s. J.J. Fashion Studio Pvt., Ltd., in respect of P.C. advances shows that the Scheme had not been properly implemented by the Br. Manager/A.1. The export advances made by the Banks are covered under ECGC. The Bank has to make payment of premium to the Corporation periodically and the packing credit advances will have to be made only in accordance with the said Scheme. In the case when the Bank made claim with ECGC in respect of the outstanding liabilities of M/s. J.J. Fashion Studio Pvt., Ltd., the Corporation rejected the claim on various discrepancies.
50. P.W.37 has stated in his evidence that he had worked on deputation as Police Inspector, CBI/ACB/BNG from 11/4/1996 to June 2001. On the complaint filed by P.W.31/Sri. G.V.U.N.Murthy, AGM, Andhra Bank on 27/12/1999 as per Ex.P.98 he registered a case in RC No.15(A)/99-ACB/C.B.I./BNG against the accused for the 98 Spl.C.C.No.157/2001 offences U/s.120-B r/w/s.420 I.P.C., & Sec.13(2) r/w/s.13(1)
(d) of P.C. Act, 1988 as per the orders of the S.P. FIR is marked as Ex.P.137 and signature of the witness is marked as Ex.P.137(a). On 20/4/2000 he received certain documents from the Br. Manager, Andhra Bank, Chamarajpet Branch and the said letter is marked as Ex.P.138. Under this letter received from the Andhra Bank dt. 19/4/2000 he had collected the following documents :-
1. On Demand Pronote dt. 31/12/1994 executed by M/s.
J.J. Fashion Studio Pvt., Ltd., which is marked as Ex.P.139.
2. Packing Credit Agreement dt. 13/11/1995 executed by M/s. J.J. Fashion Studio Pvt., Ltd., which is marked as Ex.P.140.
3. Absolute Sale Deed dt. 16/11/1994 (already marked as Ex.P.1).
4. General Power of Attorney dt. 20/11/1994 (already marked as Ex.P.3).
5. Packing Credit Agreement executed by M/s. J.J. Fashion Studio Pvt., Ltd., which is marked as Ex.P.141.
6. On Demand Pronote dt. 13/11/1995 executed by M/s. J.J. Fashion Studio Pvt., Ltd., which is marked as Ex.P.142.
7. Bill Purchase Agreement which is marked as Ex.P.143.
8. Letter of Guarantee which is marked as Ex.P.144. 99 Spl.C.C.No.157/2001
9. Extracts from the Minutes of the Board Meeting dt. 12/11/1995 which is marked as Ex.P.145.
10. Limit Cancellation letter dt. 13/11/1995 which is marked as Ex.P.146.
11. Letter dt. 30/11/1994 addressed to the Manager, Andhra Bank by the GPA holder of Mr.B.K. Doraiswamy containing the list of documents which is marked as Ex.P.147.
The I.O. states that along with the letter which is already marked as Ex.P.138, the Br. Manager, Andhra Bank, Chamarajpet Branch had handed over the documents mentioned in the list annexed to that letter which is marked as Ex.P.138(a). Under this list of documents in Ex.P.138(a) received from the Andhra Bank, Chamarajpet Branch he had collected the following documents:-
1. Pronote dt. 30/11/1994 executed by M/s. J.J. Fashion Studio Pvt. Ltd., which is marked as Ex.P.148.
2. Packing Credit Agreement dt. 30/11/1994 which is marked as Ex.P.149.
3. Form No. RF-298 ie., Bank's right to cancel limits which is marked as Ex.P.150.
4. Letter of Guarantee dt. 30/11/1994 which is marked as Ex.P.151.
5. Another Letter of Guarantee dt. 30/11/1994 which is marked as Ex.P.152.100 Spl.C.C.No.157/2001
6. Two Affidavits executed by Mr. F. Don Bosco both dt.
3/9/1996 which are marked as Ex.P.153 and P.154.
7. Two Public notices taken by Andhra Bank issued in Deccan Herald dt. 9/8/1997 and Kannada Prabha dt. 10/8/1997 which are marked as Ex.P.155 and P.156.
8. Xerox copy of legal notice dt. 17/6/1997 which is marked as Ex.P.157.
9. Reply notice sent by B.K. Doraiswamy dt. 29/9/1997 which is marked as Ex.P.158.
10. Another legal notice caused on behalf of Bank dt. 11/7/1997 which is marked as Ex.P.159.
11. Reply notice caused on behalf of Mr. D. Martin which is marked as Ex.P.160 dt. 16/8/1997.
12. Legal Notice caused on behalf of M/s. J.J. Fashion Studio Pvt. Ltd., to the Andhra Bank dt. 20/8/1997 which is marked as Ex.P.161.
13. Six Statement of a/c. extracts relating to Packing Credit of M/s. J.J. Fashion Studio Pvt. Ltd., which are together marked as Ex.P.162.
14. Statement of Loan a/c. of M/s. J.J. Fashion Studio Pvt. Ltd., in 7 sheets which is marked as Ex.P.163.
15. Two Statement of a/c. extracts of the Ledger a/c. of Current a/c. No.972 held with the Bank of M/s. J.J. Fashion Studio Pvt. Ltd., which are marked as Ex.P.164 and P.165.
16. Partnership letter dt. 29/11/1994 which is marked as Ex.P.166.
17. Xerox copy of Appraisal of Import and Export Credit of M/s. J.J. Fashion Studio Pvt. Ltd., (in 15 pages) which is marked as Ex.P.167.
101 Spl.C.C.No.157/2001
18. Two photocopies of the Property Statements of Mrs. Joseph and Mr. F. Don Bosco, which are marked as Ex.P.168 and P.169.
19. Xerox copy of the letter given by M/s. J.J. Fashion Studio Pvt. Ltd., dt. 15/7/1995 to Andhra Bank which is marked as Ex.P.170.
The I.O. states that along with the receipt memo which is now marked as Ex.P.171, the Br. Manager, Andhra Bank, Chamarajpet Branch had handed over the below mentioned documents. Signature of PW.37 on the receipt memo is marked as Ex.P.171(a).
1. A Transfer Credit Voucher dt. 30/11/1994 which is marked as Ex.P.172.
2. A Cheque dt. 30/11/1994 (already marked as Ex.P.101).
3. A Cheque dt. 30/11/1994 which is marked as Ex.P.173.
4. A Cheque dt. 1/2/1994 (already marked as Ex.P.107).
5. A Transfer Credit Voucher dt. 31/12/1994 which is marked as Ex.P.174.
6. A Cheque dt. 30/12/1994 which is marked as Ex.P.175.
7. A Cheque dt. 5/1/1995 (already marked as Ex.P.102).
8. Another Cheque dt. 5/1/1995 (already marked as Ex.P.103).
9. A Cheque dt. 10/1/1995 which is marked as Ex.P.176. 102 Spl.C.C.No.157/2001
10. A Cheque dt. 13/1/1995 which is marked as Ex.P.177.
11. A Cheque dt. 13/1/1995 which is marked as Ex.P.178.
12. A Cheque dt. 22/2/1995 which is marked as Ex.P.179.
13. A Cheque dt. 23/2/1995 which is marked as Ex.P.180.
14. A Transfer Credit Voucher dt. 7/3/1995 which is marked as Ex.P.181.
15. A Cheque dt. 7/3/1995 which is marked as Ex.P.182.
16. A Transfer Credit Voucher dt. 8/3/1995 which is marked as Ex.P.183.
17. A Cheque dt. 8/3/1995 which is marked as Ex.P.184
18. A Transfer Debit Voucher dt. 10/3/1995 which is marked as Ex.P.185.
19. A Cheque dt. 10/3/1995 which is marked as Ex.P.186.
20. A Cheque dt. 7/3/1995 which is marked as Ex.P.187.
21. A Transfer Credit Voucher dt. 11/3/1995 which is marked as Ex.P.188.
22. A Cheque dt. 14/3/1995 which is marked as Ex.P.189.
23. A Transfer Credit Voucher dt. 20/3/1995 which is marked as Ex.P.190.
24. A Transfer Credit Voucher dt. 23/2/1995 which is marked as Ex.P.191.
25. A Cheque dt. 22/3/1995 which is marked as Ex.P.192.
26. A Cheque dt. 6/4/1995 which is marked as Ex.P.193.
27. A Transfer Credit Voucher dt. 19/4/1995 which is marked as Ex.P.194.
103 Spl.C.C.No.157/2001
28. A Transfer Credit Voucher dt. 20/4/1995 (already marked as Ex.P.42).
29. A Transfer Credit Voucher dt. 5/5/1995 which is marked as Ex.P.195.
30. A Cheque dt. 6/5/1995 which is marked as Ex.P.196.
31. A Cheque dt. 8/5/1995 which is marked as Ex.P.197.
32. A Transfer Credit Voucher dt. 10/5/1995 which is marked as Ex.P.198.
33. A Cheque dt. 16/5/1995 which is marked as Ex.P.199.
34. A Cheque dt.26/5/1995 (already marked as Ex.P.104).
35. A Transfer Credit Voucher dt. 26/5/1995 (already marked as Ex.P.111)
36. A Cheque dt.29/8/1995 (already marked as Ex.P.105).
37. A Transfer Credit Voucher dt.29/5/1995 (already marked as Ex.P.113).
38. A Cheque dt. 30/5/1995 (already marked as Ex.P.106)
39. A Cheque dt.31/5/1995 which is marked as Ex.P.200.
40. A Cheque dt. 13/6/1995 which is marked as Ex.P.201.
41. A Cheque dt. 15/6/1995 which is marked as Ex.P.202.
42. A Cheque dt. 22/6/1995 which is marked as Ex.P.203.
43. A Transfer Credit Voucher dt. 22/6/1995 which is marked as Ex.P.204.
44. A Cheque dt. 23/6/1995 which is marked as Ex.P.205.
45. A Cheque dt. 29/6/1995 which is marked as Ex.P.206.
46. A Cheque dt. 7/7/1995 which is marked as Ex.P.207.
47. A Cheque dt.17/7/1995 which is marked as Ex.P.208. 104 Spl.C.C.No.157/2001
48. A Transfer Credit Voucher dt. 18/7/1995 which is marked as Ex.P.209.
49. A Cheque dt. 18/7/1995 which is marked as Ex.P.210.
50. A Cheque dt. 18/7/1995 which is marked as Ex.P.211.
51. A Cheque dt. 27/7/1995 which is marked as Ex.P.212.
52. A Cheque dt. 27/5/1995 which is marked as Ex.P.213.
53. A Transfer Credit Voucher dt. 28/7/1995 which is marked as Ex.P.214.
54. A Cheque dt. 29/7/1995 which is marked as Ex.P.215.
55. A Transfer Credit Voucher dt. 31/7/1995 which is marked as Ex.P.216.
56. A Cheque dt. 31/7/1995 which is marked as Ex.P.217.
57. A Cheque dt. 29/7/1995 which is marked as Ex.P.218.
58. A Cheque dt. 24/8/1995 which is marked as Ex.P.219.
59. A Transfer Credit Voucher dt. 30/8/1995 which is marked as Ex.P.220.
60. A Cheque dt. 1/9/1995 which is marked as Ex.P.221.
61. A Cheque dt. 30/9/1995 which is marked as Ex.P.222.
62. A Transfer Credit Voucher dt. 30/3/1996 which is marked as Ex.P.223.
63. A Transfer Credit Voucher dt. 15/5/1996 which is marked as Ex.P.224.
64. A Cheque dt. 16/5/1996 which is marked as Ex.P.225.
65. A Cheque dt. 18/5/1996 which is marked as Ex.P.226.
66. A Cheque dt. 22/5/1996 which is marked as Ex.P.227. 105 Spl.C.C.No.157/2001 The I.O. states that on 8/8/2000 the Br. Manager, Andhra Bank, Chamarajpet Branch, Bangalore addressed a letter to the CBI, which is marked as Ex.P.228. Ex.P.228(a) is the signature of P.W.37. The I.O. states that under this letter the Br. Manager produced certain documents which are as below:-
1. A Letter addressed to AGM dt. 12/11/1994 (already marked as Ex.P.15)
2. Sanction letter dt. 22/11/1994 of the Zonal Office, Bangalore (already marked as Ex.P.18)
3. Sanction letter dt. 30/12/1994 of the Zonal Office, Bangalore (already marked as Ex.P.20)
4. Office copy of the letter dt. 14/11/1994 which is marked as Ex.P.229.
5. Xerox copies of the Property Statements of Mrs. Joseph, Mr. F. Don Bosco, Mr. A.H. Manvel Joseph and Mr. Gangadhar, which are marked as Ex.P.230, P.230(a), P.230(b) and P.230(c).
6. A letter dt. 1/6/1995 addressed to the GM (Credit), Hyderabad (already marked as Ex.P.29).
7. A letter dt. 15/7/1995 addressed to the AGM, Zonal Office, Bangalore (already marked as Ex.P.37)
8. Short Inspection Report conducted by ARUN & BALU, Chartered Accountant dt. 4/6/1996 (already marked as Ex.P.94).106 Spl.C.C.No.157/2001
The I.O. states that on 3/11/2000 he examined and recorded the statement of P.W.3. On 17/1/2001 he collected 80 Vouchers pertaining to Current a/c.No.972 of A.2 Firm from the Manager, Andhra Bank, Chamarajpet Branch, Bangalore, under a receipt memo which is marked as Ex.P.231. Signature of the witness on the receipt memo is marked as Ex.P.231(a). Out of the Vouchers collected under the receipt memo in Ex.P.231 the following are the relevant Vouchers :-
1. D.D. Application Form dt. 18/7/1995 in favour of M/s.
Peerless Developers Ltd., which is marked as Ex.P.232.
2. D.D. Application dt. 27/7/1995 in favour of M/s. City Bank which is marked as Ex.P.233.
3. Pay Order Challan dt. 25/8/1995 in favour of M/s. Premier Fashion Code Pvt., Ltd., which is marked as Ex.P.234.
3a. Pay Order issued by the Bank which is marked as Ex.P.234(a).
4. Pay Order Challan dt. 1/9/1995 in favour of M/s. Premier Fashion Code Pvt., Ltd., which is marked as Ex.P.235.
4a. Pay Order issued by the Bank which is marked as Ex.P.235(a)
5. Two Pay Order Challans dt. 31/12/1994 in favour of M/s. Premier Fashion Code Pvt., Ltd., which are marked as Ex.P.236 and P.237.
107 Spl.C.C.No.157/20015a. Two Pay Orders issued by the Bank which are marked as Ex.P.236(a) and P.237(a).
6. Pay Order Challan dt. 8/3/1995 in favour of M/s. Premier Fashion Code Pvt., Ltd., and one Pay Order which are marked as Ex.P.238 and P.238(a).
7. Pay Order challan dt. 8/3/1995 in favour of Janakamma and one Pay Order which are marked as Ex.P.239 and P.239(a).
8. Pay Order Challan dt. 31/5/1995 in favour of M/s. Premier Fashion Code Pvt., Ltd., and one Pay Order which are marked as Ex.P.240 and P.240(a).
9. Pay Order Challan dt. 29/6/1995 in favour of M/s. Premier Fashion Code Pvt., Ltd., which is marked as Ex.P.241.
10. Pay Order Challan dt. 31/5/1995 in favour of M/s. Art Exports, which is marked as Ex.P.242.
11. Pay Order Challan dt. 31/7/1995 in favour of M/s. Premier Fashion Code Pvt., Ltd., which is marked as Ex.P.243.
The I.O. states that on 25/1/2001 he received certain documents from the Br. Manager, Andhra Bank, N.R.Road Branch, Bangalore under Ex.P.244. His signature on the same is marked as Ex.P.244(a). The 19 documents which are labeled as Prosecution Document No.220 have been together marked as Ex.P.249. On 30/1/2001 he collected 20 Paid DDs from R. Kaliamurthy, Br. Manager, Andhra Bank, Erode Branch under Receipt Memo and the Receipt Memo together 108 Spl.C.C.No.157/2001 with 20 paid DDs together are marked as Ex.P.250. Ex.P.250(a) is the signature of P.W.37. The witness identifies the said 20 paid DDs which are in Ex.P.82, P.83, P.74 to 81, P.67, P.63 to 66 and P.68 to 70. The Receipt Memo for having collected certain documents from Andhra Bank, N.R.Road Branch is marked as Ex.P.251 and signature of the witness is marked as Ex.P.251(a). The witness states that under the receipt memo he had collected 9 Export Bills and out of the same the Export Bill No.C337074 is already marked in Ex.P.129, Export Bill No.C337075 has been marked as Ex.P.130, Export Bill No.C337079 has been marked as Ex.P.131, Export Bill No.C337098 has been marked as Ex.P.132, Export Bill No.C337111 has been marked as Ex.P.133 and the Export Bill No.C337116 has been marked as Ex.P.134. The witness states that documents pertaining to Export Bill No.C337102 is marked now as Ex.P.252. The 3 Applications and one request for advance together (in six sheets) are marked as Ex.P.253.
On 14/2/2001 he examined C.W.22 and C.W.23 and collected the documents in Ex.P.254. Signature of P.W.37 is 109 Spl.C.C.No.157/2001 marked as Ex.P.254(a). Under the Seizer Memo he collected carbon copies of the 3 invoices of Bangalore Embroidery Works Pvt. Ltd., which are marked as Ex.P.255 to P.257. On the very day he collected certain documents under the Seizer Memo marked in Ex.P.258. Ex.P.258(a) is the signature of P.W.37. Under this Seizer Memo he collected office copies of the 20 invoices and one letter which are marked as Ex.P.259 to P.278 and Ex.P.279 respectively. On 22/2/2001 he collected certain documents of M/s. J.J. Fashion Studio Pvt., Ltd., from Andhra Bank, Zonal Office, Bangalore under the letter marked in Ex.P.280. Signature of the witness is marked in Ex.P.280(a). The witness states that under this letter the documents collected by him are in Ex.P.14, P.15(a) & P.15(b), P.17, P.31, P.231, P.34, P.35, P.36, P.37 and P.38. He made a proposal to the S.P. CBI, ACB, Bangalore to depute Sri. Gopinathan - P.W.38, P.I. CBI, Bangalore to conduct part of investigation at Salem and Erode. On 23/2/2001 he entrusted him for conducting part investigation in the case. On 5/3/2001 he collected certain documents from Catholic Syrian Bank, Gandhinagar Branch vide letter dt. 3/3/2001 which is marked as Ex.P.281. 110 Spl.C.C.No.157/2001 Signature of the witness is marked as Ex.P.281(a). The documents seized under this letter are an a/c. Opening Form of M/s. First Fashion Code Pvt. Ltd., Bangalore and a confidential letter addressed by A.1 to the Br. Manager, Catholic Syrian Bank which are marked as Ex.P.282, P.283 respectively. On 9/3/2001 he paid a visit to Andhra Bank, Chamarajpet Branch, Bangalore and collected certain documents under the Seizer Memo. The documents collected by him under the Seizer Memo are marked in Ex.P.284 and P.285. Signatures on these documents of P.W.37 are marked as Ex.P.284(a) and P.285(a).
The I.O. states that under the Seizer Memo in Ex.P.284 he had seized the Loan Application of A.2 in Ex.P.12, the Letter of Credit in Ex.P.13 and Property Statements of Mr. F. Don Bosco, Smt. Jayamani and A.H. Manvel Joseph marked in Ex.P.230. He had also seized Memorandum and Articles of Association (one booklet) which is marked in Ex.P.286. He had seized the Packing Credit Ledger registers marked in Ex.P.287 and P.288. He had also seized the documentary bill register which is marked in Ex.P.120. Ex.P.120(e) is an entry found on page No.20 of the Register dt. 10/3/1996. He had 111 Spl.C.C.No.157/2001 also seized xerox copy of the letter with endorsement marked in Ex.P.57 and the copies of the stock statements of M/s. J.J. Fashion Studio Pvt., Ltd., marked in Ex.P.58 to P.62. The Certificate of Registration of Mortgage etc., dt. 30/6/1995 issued by the Registrar of Companies is marked as Ex.P.289.
The I.O. states that under the Seizer Memo in Ex.P.285 he had seized the Debit Voucher dt. 30/11/1994 in Ex.P.2, the Debit Vouchers dt. 31/12/1994, 7/3/1995 and 8/3/1995 which are now marked as Ex.P.290 to P.292. He had also seized under the Seizer Memo in Ex.P.285 the documents marked in Ex.P.114 to P.118, Ex.P.41, Ex.P.195, Ex.P.198, Ex.P.110 and Ex.P.112. The I.O. states that he had also seized the Debit Vouchers marked now as Ex.P.293 to P.300 under the same Seizer Memo. He further states that he had also seized the Debit/Credit Vouchers marked in Ex.P.55 and P.56 under the same Seizer Memo. On 11/3/2001 he received the investigation papers conducted by Sri. Gopinath, P.I. (P.W.38) along with the documents marked in Ex.P.90, P.91, P.92, P.245 to P.247 and the letter of Andhra Bank, Salem 112 Spl.C.C.No.157/2001 marked in Ex.P.301. He further speaks that on 13/3/2001 he received the copies of the legal opinion dt. 11/2/1997 marked in Ex.P.86 and Ex.P.87. He examined Sri. K.V.Naresh, Advocate (P.W.24) and recorded his statement. On 14/3/2001 he received the letter along with Valuation Report of Sri. V.S. Shanbhag, which are marked in Ex.P.302 and P.303. On 21/3/2001 he collected the documents from P.W.7 marked in Ex.P.46 and Ex.P.47. On 27/3/2001 he examined P.W.7 and recorded his statement. On 2/4/2001 he examined P.W.1 and recorded his statement. On 4/4/2001 he examined P.Ws. 14, 28 and P.W.4 and recorded their statements. He also collected the Vigilance Enquiry Report in Ex.P.135 and included the same in investigation papers. On 7/4/2001 he examined P.Ws. 4, 8 and 9 and recorded their statements. On 9/4/2001 he examined P.W.35, on 10/4/2001 he examined P.W.33 and P.W.34, on 12/4/2001 he further examined P.W.34 and recorded their statements. On 19/4/2001 he examined P.Ws.5 and 6, on 26/4/2001 he examined P.W.36 and on 27/4/2001 he further examined P.W.36 and recorded their statements. On 28/4/2001 he examined P.Ws.13 and P.W.34, on 29/4/2001 113 Spl.C.C.No.157/2001 he examined P.W.9 and on 2/5/2001 he examined P.W.10 and recorded their statements. On 3/5/2001 he examined P.W.11, on 4/5/2001 he examined P.W.2 and on 5/5/01 he examined P.W.12 and recorded their statements. On 10/5/2001 he examined P.W.29, on 11/5/2001 he further examined P.W.4 and on 13/5/2001 he further examined P.W.1 and recorded their statements. On 14/5/2001 he examined Sri. V.S. Shanbhag, Chartered Accountant and recorded his statement. On 24/5/2001 he examined P.W.30, on 26/5/2001 he examined P.W.11, on 28/5/2001 he examined P.W.20, on 29/5/2001 he examined P.W.23 and recorded their statements. On 1/6/2001 he received the original documents in Ex.P.135 to P.137 as well as Ex.P.48 and included the same in investigation papers. On 2/6/2001 he examined P.W.26. On 12/6/2001 he handed over further investigation in the case to P.W.39.
51. P.W.38 has stated in his evidence that he was working as an Inspector of Police, CBI/ACB/BNG during the period from 1993 to 2002. On 23/2/2001 as per the directions of the S.P. CBI, ACB, Bangalore, he has conducted 114 Spl.C.C.No.157/2001 further investigation in the case. On 24/2/2001 he visited Vysya Bank, Chowapet, Salem and collected the two documents which were recovered under a Receipt Memo. On 25/2/2001 he examined P.Ws.15 and 27 and recorded their statements at Salem. On 26/2/2001 he examined C.W.26 and recorded his statement. On the very day he collected some documents marked in Ex.P.90 to P.92 from Mr. Shanmuga Sundaram, Sub-Manager, Andhra Bank, Salem under a Receipt Memo. He also collected Ex.P.245 to P.247 and included the same in investigation papers which are the Demand Drafts. On 27/2/2001 he examined and recorded the statements of P.W.16 and P.W.17. On 28/2/2001 he examined and recorded the statements of P.W.18 and P.W.21 and P.W.22. On 26/2/2001 he had received the documents in Ex.P.90 to P.92 and Ex.P.245 to P.247 under a Receipt Memo. He had also received Ex.P.248 on the same day. On 11/3/2001 he handed over the documents received under Receipt Memos collected during investigation and further handed over the investigation papers conducted by him to the main I.O. in the case/Mr.T.V. Shashikumar/ P.W.37.
115 Spl.C.C.No.157/2001
52. P.W.39 has stated in his evidence that from Sept.2000 to May 2003 he has worked as Police Inspector, CBI, ACB, Bangalore. After the receipt of sanction orders in the case, at the instruction of S.P. CBI, ACB, Bangalore he collected the certified copy of the Manuals of Andhra Bank, Zonal Office, Bangalore consisting of 11 pages of Volume No.V, which is together marked as Ex.P.304. After going through the entire investigation papers he having found that there are sufficient materials against the accused to prosecute them, he filed charge-sheet against them.
53. The instant case relates to sanction and disbursal of Credit facilities to M/s.J.J.Fashion Studio Pvt.Ltd.- a Partnership Firm floated by A.2/Mr.F.Don Bosco with his father Mr.Manuel Joseph and other partners. The evidence on record reveals that Mr.F.Don Bosco had two other Firms by name-M/s.First Fashion Code Pvt.Ltd. and M/s.Premier Fashion Code Pvt. Ltd. In M/s.First Fashion Code Pvt. Ltd., A.2 and his wife were the Directors whereas M/s. Premier Fashion Code Pvt. Ltd. is a Proprietory concern having A/c. with The Federal Bank, Gandhinagar, Bangalore. M/s.First 116 Spl.C.C.No.157/2001 Fashion Code Pvt. Ltd. maintained it's A/c. with Catholic Syrian Bank, Gandhinagar, Bangalore and the evidence on record makes it clear that it enjoyed certain credit facilities with the Bank. M/s.First Fashion Code Pvt. Ltd. was in trade of readymade garments as merchant Exporter without any manufacturing unit of its own. Learned Spl.P.P. submits that both these units were represented by A.2 and his family members as Proprietor or as Directors and hence, they were only family concerns.
54. A.1 was the then Br. Manager of Andhra Bank, Chamarajpet Branch, Bangalore. P.W.31 has lodged a complaint as per Ex.P.98 Dt.29.09.1999 alleging that the Br. Manager was exceeding the sanction limits and releasing the funds without obtaining sanction. The complaint is made with C.B.I in this regard by P.W.31 and he has made it clear even in his cross examination that he had personally verified to ascertain the truth or otherwise of the allegations made against the Br. Manager of the Bank (A.1) as narrated in the complaint. He even states that prior to the lodging of the complaint he did verify the Investigation Report of the Vigilance Officer and other documents. P.W.4 has spoken 117 Spl.C.C.No.157/2001 with respect to the sanction of PC.limits and the procedure adopted for sanction of P.C.limits. Even he has stated in his evidence with regard to A.1 not giving any response to the letters addressed by the Head Office in sanctioning the P.C.limits. Learned Spl.P.P. has drawn my attention to para nos. 3, 4, 7 to 10, 12 to 16, 18 and 21 of the evidence of P.W.4. Ex.P.12 Dt.08.11.1994 is the Application for loan facility submitted by M/s.J.J.Fashion Studio Pvt.Ltd. for PC.limits of Rs.50 Lakhs and Cash Credit of Rs.10 Lakhs and along with the Application the borrower has furnished the copy of the Letter of Credit as per Ex.P.13 issued by the Union Bank of Switzerland. In Ex.P.14 A.1 has submitted the Appraisal Report and the Br. Manager recommends for the sanction of the PC.limits of Rs.60 lakhs for export of readymade garments. Regarding experience, A.1 states that Mr.F.Don Bosco has sufficient experience in trade and has done turnover of Rs.80 lakhs in 1992 through M/s.First Fashion Code Pvt. Ltd. It is not in dispute that the said Company had availed loan from Catholic Syrian Bank and the same was exhausted. However, they had export orders worth Rs.100 lakhs which they wanted to execute through 118 Spl.C.C.No.157/2001 M/s.J.J.Fashion Studio Pvt.Ltd. and credit facilities were sought from Andhra Bank, Chamarajpet Branch, vide loan Application submitted by A.2.
55. A.1 has stated that out of the pending sanction of Rs.60 lakhs, party immediately wants Rs.40 Lakhs to execute the orders on time and a Note has been made by A.1 stating that the party wants Rs.20 lakhs at present for which collateral security worth Rs.20 lakhs would be offered. Same was sanctioned vide Ex.P.18 subject to the condition that the Stock Statements should be submitted within 7 days. Learned Spl.P.P. has also drawn my attention with respect to the three conditions enumerated therein which are to be complied with, which are stated by P.W.4 in para-8 of his evidence. Ex.P.19 is a letter Dt.30.12.1994 addressed by A.1 to the Zonal Office about the change of partnership firm into a Private Ltd. Co., further stating that fresh documents, including the documents to create charge with the Registrar of Companies would be furnished. By this letter A.1 had recommended for additional PC.limits of Rs.10 lakhs. Rs.20 lakhs amount was already released and with this additional 119 Spl.C.C.No.157/2001 limit amounting to Rs.30 lakhs would be liquidated once the Bills are negotiated as stated in the evidence of P.W.4. Accordingly, as per Ex.P.20 additional limit was also sanctioned on 30.12.1994.
56. P.W.4 has further stated in his evidence that on 02.03.1995 A.1 had sent a letter to the A.G.M., Zonal Office, stating that the borrower has submitted Export Bill worth Rs.12 lakhs vide Ex.P.21. In the evidence he has stated that there are further shipments for Rs.17.5 lakhs and for Rs.12.5 lakhs as stated by him which would liquidate the entire PC.limits of Rs.30 Lakhs. It is stated in his evidence that A.1 has submitted that the Bills of Rs.12 lakhs are submitted to N.R. Road Branch. Ex.P.22 is a letter of P.W.4 addressed to Chamarajpet Branch stating that the Branch is permitted to release P.C.of Rs.30 lakhs on regular basis against the Letter of Credit only and the Bank has to comply all the terms & conditions of the earlier sanction letters. Ex.P.23 is a letter dtd. 10.03.1995 addressed by A.1 to the Chief Manager, N.R.Road Branch by which he has requested the N.R.Branch to discount the two Bills worth Rs.9 Lakhs and the proceeds 120 Spl.C.C.No.157/2001 to be credited to the P.C. A/c. of A.2. Accordingly, vide Ex.P.24, N.R.Road Branch has permitted to discount the said Bills submitted subject to the condition that it is in conformity with the Letter of credit vide it's mail marked in Ex.P.24. As deposed by P.W.4, Ex.P.25 is a letter of the Chief Manager of N.R.Road Branch, requesting to purchase another bill for Rs.6,10,611/-. A.1 had requested the Zonal Office to permit the N.R.Road Branch to purchase earlier bill for Rs. 4,41,000/- by including the amendment letter received from Canara Bank.
57. The Zonal Office vide mail in Ex.P.26 permitted the N.R.Road Branch to purchase the Bill for Rs.6,10,611/- provided it is in conformity with the Letter of credit. As pointed out by the Learned Spl.P.P. in the letter at Ex.P.27 reasons for urgency are not mentioned and when it was requested to be rectified, a note in Ex.P.27(d) of P.W.4 that the Branch is required to give clear picture of the account before seeking confirmation was issued. The Chief Manager of the Zonal Office has made an endorsement in Ex.P.27(f) according to the note put by P.W.4. In Ex.P.28 P.W.4 has 121 Spl.C.C.No.157/2001 advised A.1 to give clear position of the A/c. for their consideration, further stating that the documentation irregularities are rectified and thereafter only confirmation would be taken. As stated by P.W.4 in Ex.P.29, pending letter of credits were informed by A.1 and A.1 has requested for sanction of ad-hoc PC.limits of Rs.12 lakhs against the letter of credits and has promised to submit enhancement proposal within a fortnight and has further stated that A.1 released Rs.12 lakhs for a period of 30 days after obtaining oral permission from the G.M., Head Office. It is deposed by P.W.4 that A.1 approached the Head Office directly bypassing the Zonal Office and the Zonal office was not aware of release of Rs. 12 Lakhs until it received Ex.P.29. In Ex.P.33 A.1 has mentioned the details of the Bills under 'Items in Transit'. P.W.4 has asked A.1 vide Ex.P.33(a) asking him to furnish the details of the limits, liability, dates of bills and due date and realization of those bills vide endorsement in Ex.P.33(b).
58. The Head office has addressed a letter as per Ex.P.34 intimating that they have not received information in the standard Proforma for processing the confirmation of 122 Spl.C.C.No.157/2001 branch action in releasing P.C. of Rs.12 lakhs. Ex.P.35 is the office copy of the letter addressed by the Zonal Office to A.1 advising him to submit the said information immediately. By writing a letter as per Ex.P.38 the Zonal Office has informed that the track record of the party is not good which can prove costly to the Bank and not to entertain the proposal submitted by the branch. Further, in Ex.P.38 marked to the Branch it has been advised to pursue vigorously with the party to see that the liability is adjusted at the earliest and to treat the matter as 'most urgent'. As submitted by the learned Spl.P.P. when the borrower had approached another Bank and in the meanwhile he had already availed the credit facility, he has to obtain the credit report and 'no objection' from the Bank before availing loan from Andhra Bank. P.W.4 has stated regarding the same in his evidence. He has clearly stated with respect to the irregularities committed by A.1 and the overdraft extended to the party beyond the limits.
59. Learned Spl.P.P., inviting my attention to the evidence produced by the prosecution states that A.2 continued to Bank with Catholic Syrian Bank and Federal 123 Spl.C.C.No.157/2001 Bank during Nov.1994 and after setting up of M/s. JJ Fashion Studio Pvt. Ltd he approached Andhra Bank, Chamarajpet Branch for Export Credit Facility intending to set up the manufacturing unit for making woolen garments for export and would initially need P.C. (Packing Credit) and FBP (Foreign Bill Purchase). It is stated that except showing initial inclination for setting up of manufacturing unit A.2 did not take any further steps at any point of time. Hence, setting up of M/s.J.J.Fashion Studio Pvt.Ltd. was not at all necessary except to avail huge sum from the Bank and to siphon the funds for the necessity of other existing units of A.2 viz., M/s.First Fashion Code Pvt. Ltd. and M/s.Premier Fashion Code. It is stated that M/s.J.J.Fashion Studio Pvt.Ltd. being a new customer to Andhra Bank, without having any past dealings with the Bank and even before they opening the A/c. in the Bank, A.1 entertained their Application for loan Dt.08.11.1994 for sanction of Export limits to the tune of Rs.60 lakhs and FBP to the tune of Rs.60 lakhs as working capital requirement.
124 Spl.C.C.No.157/2001
60. The Loan Application of M/s.J.J.Fashion Studio Pvt.Ltd.was not supported by the required documents such as property statements of the Partners, I.T. & Sales Tax Returns and Certificate of Registration of Firms. It is stated that in order to show that M/s.J.J.Fashion Studio Pvt.Ltd. had past experience the Balance Sheet and Orders on hand pertaining to M/s.First Fashion Code Pvt. Ltd. were furnished along with the loan application. The details of the securities to be offered were not furnished by M/s.J.J.Fashion Studio Pvt.Ltd. Hence, it is stated that A.1 being the Br. Manager of Andhra Branch did not look to these points and he strongly recommended for sanction of limits as requested by A.2. Learned Spl.P.P. contends that A.1 being the Br. Manager of Andhra Bank before recommending for credit facilities as sought by A.2 ought to have asked for P & C Report from Catholic Syrian Bank regarding the means, integrity and credit worthiness of M/s.First Fashion Code Pvt. Ltd., where A.2 was one of the Directors along with 'no objection'. Even he ought to have asked for the need to start a new firm when his existing firms had already developed its export market and in case limits enjoyed by A.2's existing firms 125 Spl.C.C.No.157/2001 with Catholic Syrian Bank were not enough, possibility of taking over those A/c. itself and giving required limits could have been considered.
61. It is stated that no Income Tax/Wealth Tax Returns of the Partners was called for and hence, Sales Tax Registration of the Firm was not insisted upon. It is contended that both M/s.J.J.Fashion Studio Pvt.Ltd. & M/s. First Fashion Code Pvt. Ltd. were housed in the same premises and such being the case no precaution was taken to see that stocks were segregated and identified as stock belonging to two units. Further, as per the particulars submitted by M/s.J.J.Fashion Studio Pvt.Ltd. firm had brought in working capital of Rs.15 lakhs. No steps were taken to ensure whether it was so done by way of balance sheet or certificate by a Chartered Accountant, etc., Further, M/s.J.J.Fashion Studio Pvt.Ltd. itself defined it as a merchant Exporter and it would get the products ready by getting the same done by others. The Br. Manager/A.1 never looked into this fact as to how the Bank could exercise its lien over the goods held by other processing units. 126 Spl.C.C.No.157/2001
62. In the letter addressed to the Zonal Office (as per Ex.P.14), A.1 requested the Zonal Office for sanction of PC.limit of Rs.40 lakhs pending regular sanction and stated that the party had agreed to PC.limits of Rs.20 lakhs to execute letter of credits in hand. A.1 further stated in the letter that the party has been enjoying the credit facilities of Rs.15 lakhs and FPB for Rs.30 lakhs with Catholic Syrian Bank and they had promised to shift their transaction from Catholic Syrian Bank to Andhra Bank once the existing PC.limits is closed. Learned Spl.P.P. states that neither A.2 did take any step in liquidation of the liability outstanding with Catholic Syrian Bank nor A.1 did any follow up action in this regard. It is further stated that as per the letter in Ex.P.18 and as stated by P.W.4 PC. limits of Rs.20 lakhs was sanctioned as one time sanction against hypothecation of stock in trade with a margin of 25% and irrevocable transfer document, letter of credit, P & C report from Catholic Syrian Bank in respect of M/s.First Fashion Code Pvt.Ltd. subject to submission of declaration from the manufacturing units stating that they will not hypothecate the stocks. Party was required to submit the property statements of the partners 127 Spl.C.C.No.157/2001 to submit the stock statements within seven days and also furnish collateral security of Rs.20 lakhs to be obtained before release of loan.
63. On 29.11.1994 current A/c. was opened by A.2, on 30.11.1994 P.C. of Rs.20 lakhs was credited to this account as deposed by PWs.34 & 36. Further, on 20.12.1994 Partnership firm was dissolved and Private Limited Co. was incorporated on the very day viz., 20.12.1994 in the name of M/s.J.J.Fashion Studio Pvt.Ltd. A.2 and his partners are the founder Directors of this Company as stated by P.W.4 and as reveled by Ex.P.19. A.1 after allowing the finance to the partnership firm, permitted the party for change of the firm into a Company and thus, lost the benefit of joint and several liability. The liability of the Company was limited only to the share capital contributed. Even then, the A/c. in the name of the firm was allowed to be operated. Even the ledger of the A/c. did not reflect the change of firm into a limited Company. On 30.12.1994 another one time PC.limit of Rs.10 lakhs was granted by the Zonal Office as per Ex.P.20 based on the letter addressed by A.1 in Ex.P.19 in which he 128 Spl.C.C.No.157/2001 informed that the party has procured order worth Rs.25 lakhs which were to be followed by the letter of credits and made it clear that the entire PC.limits of Rs.30 lakhs will be liquidated once the bills are negotiated.
64. However, instead of liquidating the PC. limits of Rs.30 lakhs A.1 by writing a letter as per Ex.P.21 requested the Zonal Office for regularization of one time limit of Rs.30 lakhs. By this letter A.1 had informed the Zonal office that the party had submitted the bills worth Rs.12 lakhs to N.R.Road Branch and the discounted amount will be adjusted to the P.C.which brings down the liability to Rs.19 lakhs. Further, A.1 had informed the Zonal Office that the party will be completing the total export of Rs.42 lakhs in a day or two as the shipment is taking place on 10.03.1995 and informed that the party had fulfilled all the sanctioned stipulation, including the equitable mortgage. As such, the Zonal Office confirmed the sanction vide Ex.P.22 of the regular PC.limits of Rs.30 lakhs against the letter of credits only. Even the letter of credits against which the PC.limits 129 Spl.C.C.No.157/2001 were allowed had certain terms and conditions detrimental to the interest of the Bank.
65. It is contended that the letter of credits should have been rejected by A.1 and finance should not have been allowed, as the conditions provide for direct dispatch of the goods to the importer at Switzerland leaving Andhra Bank no control over the goods, whether or not importer had paid for them. The dispatch directly to the party without the necessity of transportation document should have been rejected by A.1. It is stated that inspite of this A.1 was quite accommodative in his approach to A.2. The bills were accepted with discrepancies and directly mailed to the letter of credit opening Bank at Zurich (Switzerland). My attention is drawn to the evidence of P.W.4 in this regard. Further, on 30.05.1995 A.1 allowed ad-hoc P.C limit of Rs.12 lakhs for 30 days to A.2 by obtaining oral permission from the General Manager and addressed letters to the Head Office and Zonal office to confirm his action of having allowed the same. However, the Head Office sought for certain information from the Bank for confirmation of oral sanction which was 130 Spl.C.C.No.157/2001 never complied with by A.1 despite reminders, both by Head Office and Zonal Office. My attention is drawn in this regard to the evidence of P.W.36. It is also stated that the release of Rs.5 lakhs by A.1 on 26.05.1995 vide Ex.P.110 & 111 shows exceeding of limits by A.1 as regular sanction was for Rs.30 lakhs and he also allowed the withdrawals.
66. Referring to the evidence of P.W.34, with particular reference to para-7, learned Spl.P.P. states that there was a credit of Rs.12 lakhs and the earlier credit of Rs.5 lakhs was reversed on 01.06.1995 (as having been allowed inadvertently). It is stated that the credit was allowed deliberately to avoid showing the subsisting overdraft. The ad-hoc PC. of Rs.12 lakhs allowed on 30.05.1995 was again manipulated to have been credited on 29.05.1995 as overdraft. Even though the ad-hoc PC.limit of Rs.30 lakhs allowed on 30.05.1995 was for a period of 30 days, it was allowed to be continued beyond the period. On 17.07.1995 liability was reduced to Rs.26.96 lakhs. A.1 had power to allow upto Rs.30 lakhs but he allowed PC.limits upto Rs.42 lakhs. The very next day i.e., on 18.07.1995 by 131 Spl.C.C.No.157/2001 releasing the PC of Rs.15 lakhs, again A.1 had allowed Rs.5 lakhs leading to PC.limit liability to reach Rs.47 lakhs.
67. By referring to the oral evidence of P.W.36, with particular reference to Para-10 and the document in Ex.P.135/the Investigation Report, it is stated by the learned Spl.P.P. that the PC Nos.5/1995 Dt.18.07.1995, 6/1995 Dt.28.07.1995, 7/1995 Dt.31.07.1995 and 9/1995 Dt.30.08.1995 totally for Rs.29.52 lakhs allowed by A.1/Br.Manager were neither with any supporting letters of credits nor with confirmed orders. He invites my attention to para-10 of the evidence of P.W.36 and the evidence of P.W.14. Referring to page no.4 of the evidence of P.W.14, it is stated that against Fax copies of the Orders, as deposed by these witnesses, approximately a sum of Rs.55 lakhs was released. These witnesses have spoken with respect to the irregularities committed by A.1 in this regard. The overall liability in PCs. as on 20.05.1996 was Rs.44,89,580.40 plus interest. It is also stated that as per the Rules of the Banking Practice, PCs are required to be allowed by obtaining application for drawing supported by documents viz., letters 132 Spl.C.C.No.157/2001 of credits/confirmation orders, quotations, invoices for the materials to be purchased and the stock statements to ensure that the party brings in the margin and to ensure the end use. However, A.1 in PC allowance these procedure were not taken note of or followed. My attention is also drawn in this regard to Ex.P.43/original Ledger sheets in respect of the Current A/c. held by A.2.
68. It is also stated that A.1 instead of making payments to the suppliers against the invoices/quotations credited PC proceeds to the Current A/c. of A.2 and allowed the amount to be withdrawn by them without ensuring the end use of the funds. Learned Spl.P.P. has drawn my attention to the evidence of PWs.27, 34 and 37 in this respect. My attention is also drawn to the Cheque leaves marked on behalf of the prosecution in Ex.P.102, 103, 104 to 106, 116, 176, 177, 179, 182, 186, 187, 192, 193, 196, 197, 199, 202, 203, 205, 207, 208, 210, 212 and 215 to 222. It is also stated that A.2 made payments of Rs.21,85,000/- in favour of the sister concerns of A.2-Co. i.e, M/s.First Fashion Code Pvt.Ltd. and M/s.Premier Fashion Code. My attention is drawn in this regard to the documents marked on behalf of 133 Spl.C.C.No.157/2001 the prosecution in Ex.P.107, 201, 206, 221, 234, 236, 237, 238, 240 & 241. In this regard learned Spl.P.P. invites my attention to the oral evidence of P.W.34/Mrs.Uma Vasanth also. Hence, it is stated that A.1 arranged for diversion of funds to the sister concerns of A.2-Co.
69. It is stated that the credits to the A/c. are from the PCs. released. A.1 has shown extra interest to get release the sanction to A.2 - Company and very often he exceeded his powers and did not ensure the end use which was his primary duty being the Br. Manager. It is also stated that A.1 had allowed a duty drawback advance of Rs.2 lakhs to A.2-Company on 05.05.1995 without prior permission of the Head Office. It was not rectified by the Head Office even though A.2-Co. received the duty drawback advance amount from the period in between 04.05.1995 to 25.08.1995. The same was not used to adjust the advance allowed against the duty drawback advance, but it was credited to the Current A/c. of A.2. My attention is drawn to the evidence of P.W.4 in this regard, referring to Page nos.13 & 14 and also referring to the document marked for 134 Spl.C.C.No.157/2001 the prosecution in Ex.P.43. It is also stated that A.2 Co. was sanctioned only PC limits by the Zonal office, but never sanctioned any FBPs. However, it had permitted N.R.Road Br. on behalf of Chamarajapet Br. to purchase only four bills for SFR 18,085.60, SFR 26,540.50, SFR 15,182.00 & SFR 15,280.00 with a condition that the bills so submitted should be in conformity with the terms of the bills. My attention is drawn to the document in this regard in Ex.P.26.
70. It is also stated that A.1 being the Br.Manager had kept on purchasing the bills of huge amounts which were discrepant and thus, exceeded his powers to show undue favour to the party by putting the Bank to grave risk. The bills so purchased should have been used to liquidate the PC liability, but A.1 permitted some of these bills to be credited to the Current A/c. of A.2, despite the fact that huge amounts were still outstanding. Though the operation of M/s.J.J.Fashion Studio Pvt.Ltd. was not satisfactory, A.1 went on recommending by sending proposal for higher limits of PC/FBP which were never sanctioned by the Head Office. In this regard, learned Spl.P.P.has invited my attention to 135 Spl.C.C.No.157/2001 the evidence of P.W.14-Chief Manager, P.W.28-Inspector of Bank and P.W.36-Chief Vigilance Officer. It is stated that Andhra Bank, Chamarajpet Branch, prior to its attaining 'B' category was required to send all its Foreign bills for purchase and collection to N.R.Road Branch, which was then 'B' category branch. It is also stated that the Bill bearing No.C-337066 amounting to Rs.7,76,781/- was purchased and lodged in N.R.Road Branch on 13.03.1995 and was realized only on 19.04.1995. However, it is stated that A.1 had shown the said bill as realized on 10.03.1995 and debited the head 'BRS/items in transit' and credited to A.2's Current A/c. Actually the bill was even not lodged in the Books of N.R.Road Branch. In this regard P.W.34 has stated the same aspect in his evidence. Learned Spl.P.P. states that Ex.P.114 & 115 are the Debit Vouchers in this regard and Ex.P.185 & 188 are the Transfer credit Vouchers.
71. Inviting my attention to Ex.P.119 to 121 and P.131 to 134/Vouchers & Foreign Exchange bills and referring to the evidence of P.W.36, in particular to para-13 learned Spl.P.P. states that though the bills were not realized in the 136 Spl.C.C.No.157/2001 books of A/c. of the Bank, by showing the same as realized the amounts were credited to the A/c. of A.2-Company Normally items pertaining to one branch which have been sent to other branch/es for collection; when realized, amounts are debited to the head "BRS/IIT" which will be adjusted whenever advice is received from the collecting branch. However, instances referred to above showed A.1 allowing to pass on credits to the A/c. of A.2-Company by debiting BRS A/c., before realization to enable A.2 to withdraw the amounts from the A/c. Thus, it is stated that A.1 being the Br. Manager, in gross negligence, abused his official position which ultimately lead to overdraft export bills. In this regard, PWs.34 to 36 have stated the same aspect before the Court. Temporary overdraft are allowed discretely to meet the emergency needs. Same is required to be adjusted within 7 days time and should not be allowed on regular basis as deposed by P.W.12. A.1 had allowed withdrawals in the Current A/c. of A.2 resulting in huge TODs and even it is said that he did not bother to inform the Head Office in this regard and did not get their approval. 137 Spl.C.C.No.157/2001
72. Referring to the oral evidence of P.Ws.7 & 36 it is stated that, it is mandatory to cover all the Export oriented A/c. including pre-shipment under ECGC cover. It is mandatory to notify the limits of ECGC, whenever limits were sanctioned to an Exporter and to keep ECGC notified about any reductions or enhancement of limits sanctioned. It is also mandatory to pay ECGC fee on a monthly basis at the prescribed rates and to fulfill all the terms of sanction. A.1 had failed to notify ECGC about the sanction of limits to A.2- Co. and had paid ECGC premiums with considerable delay. Even all the terms & conditions of sanction were not fulfilled. Hence, ECGC had rejected the claim of the Bank and thus, pushed Andhra Bank to a great risk. It is stated that this tendency of A.1 showed eagerness and hurried method adopted in accommodating A.2 - Co. It is also mandatory for the Branch Manager/A.1 to visit the site and make his own valuation about the collateral security. However, A.1 never visited the same and got deposited the title deeds of the property of the real owner through the GPA holder/A.3. It is also stated that A.1 did not interact with the actual owners of the property which were 138 Spl.C.C.No.157/2001 mortgaged with the Bank. My attention is drawn by the learned Spl.P.P. to the Manual of Instructions of the Andhra Bank (Chapter-III Vol.5) produced in Ex.P.304. Thus, non observance of the Rules pertaining to the Guarantors, deliberately allowing the withdrawals by self Cheques and allowing the withdrawals for the sister concerns of M/s.J.J.Fashion Studio Pvt.Ltd. are some of the instances of cheating the Bank and benefiting the borrower.
73. Here, P.W.19 has introduced A.2 to open A/c. holder at the instance of A.1. P.W.33 has spoken with respect to the conversion of Firm into Company. P.W.4 speaks regarding the cause for internal investigation. P.Ws.14, 28 & 36 have spoken with respect to the internal investigation of Andhra Bank, Chamarajpet Br., Bangalore and P.W.7 speaks with respect to ECGC coverage. After conducting investigation in the case, P.W.39 has filed charge sheet against the accused, having found that all the accused have committed the offences levelled. The prosecution alleges that during 1994-97, A.3 by receiving the documents of title of the properties of C.Ws.16 & 17 (PWs.1 139 Spl.C.C.No.157/2001 &2), extending some finance to them for the purpose of celebrating the marriage of the daughter of C.W.16 and for constructing house of C.W.17, kept them in darkness of creation of 'Mortgage' of their properties by depositing the title deeds of the properties with the Bank, which prima- facie discloses abetment to cheat the Bank regarding sanction and release of PC.limit of Rs.30 lakhs by the Br.Manager/A.1 in favour of A.2-Co.. As such, the prosecution alleges that A.3 has committed the offences punishable u/sec.109 r/w.Sec.420 of I.P.C.
74. Now the Court has to see whether the offence of abetment to commit the offence of cheating as levelled against A.3 has been proved here by the prosecution by producing convincing and believable evidence before the Court. Sec.107 of I.P.C., contemplates abetment of a thing and Sec.109 of I.P.C., is with regard to punishment for the said offence. A person is said to instigate another to an act when he actively suggests or stimulates him to the act by any means or language, direct or indirect, whether it takes the form of express solicitation or of hints, insinuation or 140 Spl.C.C.No.157/2001 encouragement. In order to amount to abetment there must be mens rea or community of intention. Without knowledge or intention, there can be no abetment and the knowledge and intention must relate to the crime.
75. The evidence on record reveal that C.W.16(P.W.1) Mr.B.K.Doraiswamy had instituted OS.No.8780/1997 before VIII A.C.C. & S.J., Bangalore City (CCH No.15), against A.3 and others, including Andhra Bank, praying for the reliefs of declaration that the GPA Dt.24.11.1994 in Ex.P3 obtained by A.3 from him is void and not binding on him, declaring that the acts, deeds and things done or purported to have been done by P.W.1 here on his behalf or in respect of the property pledged to the Bank in exercise of the powers alleged to have been given to A.3 under the said GPA are void and not binding upon him & permanent injunction etc.. The said suit came to be dismissed by the Court vide order Dt.25.08.2009. Ex.D.1 is the certified copy of the Judgment & Decree produced on behalf of the accused. So also, C.W.17 (P.W.2) Mr.D.Martin had instituted O.S.No.4934/1998 before VIII A.C.C. & S.J., Bangalore City (CCH No.15), against A.3 & 141 Spl.C.C.No.157/2001 others, including Andhra Bank, praying for the reliefs of declaration that the unregistered Memorandum of Understanding and documents obtained on 26.03.1997 by A.3 from him are null & void and not binding upon him and also for declaration that the acts, deeds and things done or purported to have been done by the defendants in the case on his behalf in respect of the property mortgaged with the Bank are void and not binding upon him & permanent injunction etc., which also came to be dismissed by the Court vide order Dt.30.03.2009. Ex.D.4 is the certified copy of the Judgment & Decree produced on behalf of the accused.
76. Apart from it, P.W.2/D.Martin had instituted PC No.89/1999 (C.C.No.733/2002) before the Chief Metropolitan Magistrate, Bangalore against A.3 and others, including the Br.Manager, Andhra Bank which ultimately came to be dismissed by the Court vide order dt. 12.10.2009. Apart from it, it is not in dispute here that the Andhra Bank had instituted O.A.No.148/1998 before the Debts Recovery Tribunal, Bangalore against M/s.J.J.Fashion Studio Pvt.Ltd. 142 Spl.C.C.No.157/2001 and others, including A.1 to A.3 for recovery of Rs1,44,72,580.38 Ps. In the said suit, Applicant-Bank and Respondents 1 to 4 there had entered into compromise by filing a Petition before the said Court stating that the Bank has agreed for one time settlement on payment of Rs.60 lakhs and both parties have prayed to pass a decree and issue Recovery Certificate for a sum of Rs.60 lakhs as per the compromise arrived at between the parties. Ex.D.2 is the certified copy of the compromise petition. Along with the certified copy the order sheet in the said O.A.No.148/1998 before the D.R.T., Bangalore produced reveal that in view of the compromise petition moved by both parties, O.A.No.148/1998 came to be dismissed as settled vide order dt.31.01.2007.
77. The evidence on record reveal that on the strength of the GPA executed by Mr.B.K.Doraiswamy (P.W.1) produced in Ex.P.3, A.3 had mortgaged the properties owned by Mr.B.K.Doraiswamy with the Bank for the loan extended by the Bank in favour of A.2 Co. The GPA produced in Ex.P.3 Dt.24.11.1994 reveal that the owner of the property had 143 Spl.C.C.No.157/2001 given authority to the GPA holder to execute any document that may be required to raise money for any purpose by pledging, hypothecating or mortgaging the property with any Bank or financial institution and raise money by depositing the Title Deeds or by creating mortgage by registration. Accordingly, the GPA holder has mortgaged the property owned by Mr.B.K.Doraiswamy with the Bank for extending loan to A.2 Co. Ex.P.5 is the xerox copy of the Revocation Deed produced here Dt.01.12.1994. However, the original of the same has not been produced before the Court, though it is stated in the cross examination of P.W.1, on page No.8 of his evidence that he could produce the original of the said Revocation Deed executed in favour of A.3. Learned Spl.P.P. drawing my attention to the Paper Publications taken by the Bank produced in Ex.P.155 Dt.09.08.1997 and Ex.P.156 Dt.10.08.1997 states that after the Bank published the Public Notices in "Deccan Herald" and "Kannada Prabha" intending to auction the properties mortgaged with the Bank for extending loan to A.2 which were belonging to PWs.1 & 2, false suits had been instituted by these persons against the 144 Spl.C.C.No.157/2001 Bank and others praying for declaration & injunction, etc., which were rightly dismissed by the Court.
78. The evidence on record reveal that both PWs.1 & 2 had availed certain loan from A.3 for their financial exigencies. Ex.D.5 & D.6 are the vouchers produced on behalf of A.3. Learned Spl.P.P. has drawn my attention to the documents produced by the prosecution in Ex.P.8 to P.11. Ex.P.8 is Form No.R.255/List of Documents executed by Mr.B.K.Doraiswamy in favour of the Bank and Ex.P.9 & 10 are the Guarantee Letters executed by the surety to the Bank and Ex.P.11 is a Letter Dt.03.03.1997 addressed in favour of the Bank. These documents prove beyond doubt that the Guarator/P.W.2 had mortgaged the property owned by him with the Bank for extending loan by the Bank in favour of A.2 Co. The evidence on record also reveals that by executing GPA and handing over the property documents owned by PWs.1 & 2 in favour of A.3, both of them had availed certain loans from him for their urgent family needs. Drawing my attention to the oral evidence of P.W.12/Mr.A.S.Ramamurthy, inviting my attention to para-3 145 Spl.C.C.No.157/2001 of the evidence of the witness, learned Spl.P.P. states that the witness has deposed in his evidence that the Br.Manager obtained signatures of Mr. D.Martin in his Cabin before the witness and returned the said documents to him. Witness has also stated in his evidence that the Br.Manager pointing to the person sitting in the Cabin states that he was Mr. D.Martin. Learned Spl.P.P. also draws my attention to the cross examination of the I.O/P.W.37. Adverting my attention to Page No.30, para-64 of the evidence of P.W.37 it is submitted by learned Spl.P.P. that the I.O. has admitted in his evidence that PWs.1 & 2 were the Guarantors as stated by the witness to the loan transaction in this case and it is also stated that it is true to suggest to the witness that both these witnesses/PWs.1 & 2 had given collateral security for the loan transaction that took place with the Bank as per the record.
79. On evaluation of the evidence produced before the Court, I am of the view that, it cannot be said here that the accused have committed the offence of abetment as levelled. As stated above, abetment is an instigation to a 146 Spl.C.C.No.157/2001 person to do an act in a certain way or aid some other person in doing an act which is an offence. In other words, it is a preparatory act and connotes active complicity on the part of the abettor at a point of time prior to the actual commission of the offence. Doing something for the offender is not abetment. Doing something with knowledge so as to facilitate him/her to commit the crime or otherwise would constitute abetment. The definition of abetment u/s.107 of I.P.C. portrays that to constitute abetment, the abettor must be shown to have intentionally aided the commission of the crime. In order to constitute abetment, the abettor must be shown to have "intentionally" aided the commission of the crime. Mere proof that the crime charged could not have been committed without the interposition of the alleged abettor is not enough compliance with the requirements of Sec.107. It is contended by A.3 that only on the self-serving Statements of PWs.1 & 2 recorded by the C.B.I., on they apprehending losing of their immovable properties in Public Auction, A.3 has been arrayed as an accused by the C.B.I. He is unconnected and unconcerned to the alleged offences. On analyzing the evidence on record, I 147 Spl.C.C.No.157/2001 am of the considered view that, the offence of abetment as levelled against any of the accused has not been proved here by the prosecution by placing convincing and believable evidence before the Court. As such, all the accused are entitled for an order of acquittal of the said offence.
80. Learned Counsel appearing for A.1 contends that the act of A.1 being the Br.Manager of Andhra Bank in extending loan or disbursement of FBPs or Overdrafts or Lcs is at the most irregularity on his part in functioning in the capacity as the Br.Manager and the Head Office of the Bank could have held him for misconduct. The Head Office could have initiated disciplinary proceedings against him. It is his submission that no mens rea is made out by the prosecution against A.1. The Circular produced in Ex.P.304 by the prosecution does not pertain to PC.limits. No primary evidence has been produced before the Court according to him. However, the evidence on record produced by the prosecution clinchingly proves that A.1 abusing his official position, by willful misrepresentation or concealment of facts or by accepting discrepant Foreign Exchange Bills of 148 Spl.C.C.No.157/2001 A.2, without waiting for realization of the Bills, intentionally aided A.2 Co. for PC.advances and FBP limits beyond the sanction limits and cheated the Bank. The contention of the counsel for A.1 that the Br.Manager/A.1 is only a recommending authority and he is not the final authority to disburse or sanction the loan has also no substance, in my view, in view of the powers vested with the Br.Manager in either sanctioning or recommending the loan. Though the loan process has to be vetted through various process, the Br.Manager/A.1 has recommended for sanction of PC.limit or FBPs or ODs by exceeding his powers.
81. Inviting my attention to the Order passed in O.A.No.148/1998 by the D.R.T., Bangalore produced in Ex.D.2, learned counsel for A.1 & A.2 contends that the civil dispute with regard to recovery of money due to the Bank has been settled with the Bank by A.1, A.2 and the family members of A.2 and as such, there cannot be any subsisting grievance of the Bank. In this regard while the offence u/sec.420 of I.P.C. is compoundable, it is the say of A.1 & 2 that having regard to the fact that the liability to make good the monetary loss suffered by the Bank had been mutually 149 Spl.C.C.No.157/2001 settled between the parties, accused Nos.1 & 2 cannot be held liable for any of the offences levelled. Counsel for A.1 & 2 have placed reliance on the decision reported in (2014) 5 SCC Page-364 and the decision rendered by the Hon'ble High Court in Crl.R.P. No.1022/2010 Dt.14.10.2014 (unreported). I have perused the principle laid down in these decisions by the Hon'ble Apex Court and the Hon'ble High Court. As rightly contended by the Learned Spl.P.P., the Hon'ble Apex Court and the Hon'ble High Court, evaluating the materials on record in the said cases, invoking the provision of Sec.482 of Cr.P.C. have observed that continuance of criminal proceeding which are likely to become oppressive or may partake the character of a lame prosecution would be good ground to invoke extraordinary power u/sec.482 of Cr.P.C. and accordingly, proceedings have been quashed in those cases. However, the instant case is quite different. Here proceeding is initiated on the complaint made by the AGM of Andhra Bank Dt. 27.12.1999. O.A.No.148/1998 has been initiated by the Bank before the DRT, Bangalore in the year 1998.
150 Spl.C.C.No.157/2001
82. Learned Spl.P.P. has placed reliance on the decisions reported in (1) ILR 2004 Kar.969 (Ramesh Babulal Baheti & ors. Vs. C.B.I & anr) (2) (2009) 6 SCC Page-364 (Smt.Rumi Dhar Vs. State of W.B. & anr) (3) 2009 Crl.L.J.- 3437 (CBI Vs. A.Ravishankar Prasad & Ors) & (4) SLP(Crl) No.8989/2010 (Gian Singh Vs. State of Punjab & anr) Dt.24.09.2012 (unreported). In the decision of Ramesh Babulal Baheti referred to supra, it has been held by the Hon'ble High Court that a creditor who files a complaint alleging cheating by the accused, is not precluded from seeking civil remedy for recovery of the amount advanced. In fact, he will be more interested in recovering his dues rather than in pursuing punitive action. In his endeavour to recover the money, he may enter into a compromise or arrangement for payment by the debtor and that automatically does not result in compounding of the offence. It is further held in the said decision that the compromise entered into before the DRT between the parties and when investigation is completed and charge sheet is filed, in the circumstances compromise or arrangement for payment does not automatically result in compounding of the offence. 151 Spl.C.C.No.157/2001
83. In the decision of Smt.Rumi Dhar referred to supra, the Hon'ble Apex Court has held that civil and criminal proceedings can proceed simultaneously. Bank is entitled to recover the amount of loan given to debtor. When a settlement is arrived at by and between creditor and debtor the offence committed as such does not come to an end. Judgment of the Tribunal in civil proceeding and that too when it is rendered on the basis of settlement entered into between the parties would not be of much relevance in criminal proceeding having regard to the provision in Sec. 43 of Evidence Act.
84. In the case of A.Ravishankar Prasad referred to supra, the Hon'ble Supreme Court has held that when the charge against Bank Officials for favouring private accused persons representing various companies while releasing huge loan amount to such companies, mere repayment of loan under settlement cannot exempt accused from criminal proceeding. In the case of Gian Singh referred to supra, the Hon'ble Supreme Court has held that in relation to the offences under the special statutes like P.C. Act or the 152 Spl.C.C.No.157/2001 offences committed by public servants while working in that capacity, etc., cannot provide for any basis for quashing criminal proceedings involving such offences.
85. In the case on hand, parties have not entered into compromise in relation to the criminal charges. In fact, offences alleged against the accused being one against the Society and the allegations contained in the FIR having been investigated by the CBI, it cannot be said that the compromise arrived at between the parties will have any impact on this proceeding. Bank cannot enter into any settlement in such case/s, in my considered view. Further, CBI has not filed any application for withdrawal of the case. The accused have faced full pledged trial. As rightly pointed out by the Learned Spl.P.P. judgment of DRT and that too when it is rendered on the basis of the settlement entered into by and between the parties would not be of such relevance in this criminal proceeding, having regard to the provision in Sec. 43 of Evidence Act. Learned counsel appearing for A.1 & 2 have placed reliance on the decisions reported in (1) AIR 1996 Supreme Court page 2452 (2) AIR 153 Spl.C.C.No.157/2001 2008 Supreme Court Page-251 (3) AIR 2008 S.C. page-2793, and (4) ILR 1992 Kar. 2091. I have perused the principle laid down in these decisions. The facts and circumstances of these cases, on which reliance is placed being distinguishable with the facts of the present case, the said decisions are inapplicable to the case on hand.
86. Sec.415 of I.P.C. deals with cheating; whereas Sec.420 of I.P.C. deals with cheating and dishonestly inducing delivery of the property. The offence of cheating is made of two ingredients. Deception of any person and fraudulently or dishonestly inducing that person to deliver any property to any person or to consent that any person shall retain any property. To put it differently, the ingredients of the offence are that the person deceived delivers to someone a valuable security or property, that the person so deceived was induced to do so, that such person acted on such inducement in consequence of his having been deceived by the accused and that the accused acted fraudulently or dishonestly when so inducing the person. To constitute the offence of cheating, it is not necessary that 154 Spl.C.C.No.157/2001 the deception should be by express words, but it may be by conduct or implied in the nature of transaction itself. Same is the principle laid down in the decision reported in 2003 Cri L.J 4801 (Ram Narain Poply v. Central Bureau of Investigation). Here, A.1 being the Br.Manager, when acting in that capacity his conduct was dubious from the very beginning in accommodating the loan sought by A.2 Company or for other facilities like PC. advances or ODs., etc. His intention in accommodating A.2 was clear from his actions. He was not informing his higher ups in time about the release of PC.advances, etc., beyond limits or before information is received from the Head Office he used to release the same. A.1 being the Br.,Manager was in picture at all the time when the loan was sought by A.2 and disbursed to him. His guilty intention can be attributed as such, to deceive the Bank. His conduct as such amounts to an offence punishable u/sec.420 of I.P.C.
87. On analyzing the evidence of the prosecution placed before the Court, I am of the view that A.1 being a public servant functioning as the Br. Manager of Andhra Bank 155 Spl.C.C.No.157/2001 at the relevant point of time, abusing his official position by willful misrepresentation or by willful concealment of material facts which he was bound to disclose or by accepting discrepant Foreign Exchange Bills of A.2 Co., against such bills which are not realized by debiting the head-"BRS/Items in Transit", without waiting for realization of the Bills, intentionally aided A.2 Co., for Packing Credit advances and Foreign Bill Purchase limits beyond the sanction limits and cheated the Bank causing huge wrongful loss and corresponding wrongful gain for A.2 Co. During the said period itself A.2 in order to cheat the Bank, regarding sanction and release of Packing Credit limit loan of Rs.30 lakhs in favour of M/s. J.J. Fashion Studio Pvt., Ltd., submitted false and inflated Stock Statements regarding the said Company or did not furnish complete information along with enclosures or allowed the Packing Credit against Fax copies of the order in the name of sister Concerns of M/s. J.J. Fashion Studio Pvt., Ltd., and thereby committed the offence of cheating U/s.420 of I.P.C. A.1 being a public servant by use of corrupt or illegal means, abusing his position as Public Servant, obtained for A.2 Co., pecuniary 156 Spl.C.C.No.157/2001 advantage comprising of grant of Packing Credit advance. There is overwhelming evidence produced before the Court to hold A.1 & A.2 for having committed the offence of cheating and to hold A.1 for the offence under the P.C. Act also. Some minor inconsistencies and discrepancies pointed out to me by the learned counsel for A.1 and A.2 in the prosecution evidence are not significant, in my view, so as to suspect the whole prosecution case. The evidence produced by the prosecution is not cogent and convincing so as to hold A.3 guilty for any of the offences charged. Prosecution has not proved the offence of abetment as levelled. As such, I hold point No.2 in 'Partly Affirmative', point nos.3 & 5 in the 'Affirmative' and point no.4 in the 'Negative'.
88. Point No.6:- For the aforesaid reasons, I proceed to pass the following:-
ORDER Acting u/s.235 (1) Cr.P.C. A.1 & A.2 are acquitted of the offence punishable u/s.109 of IPC and A.3 is acquitted of the offence u/s.109 r/w. Sec.420 of IPC.
A.3 is set at liberty.157 Spl.C.C.No.157/2001
Acting u/s.235(2) Cr.P.C. A.1 is convicted of the offences punishable U/s.420 of IPC & U/s.13(2) r/w Sec.13(1)(d) of The Prevention of Corruption Act, 1988 and A.2 is convicted of the offence punishable U/s.420 of IPC.
To hear regarding sentence, call later on.
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(Dictated to the Stenographer, transcribed and computerized by him and then corrected signed by me and pronounced in open Court on this the 31st day of August, 2016).
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(Pradeep.S.Balikai) XXXII Addl.City Civil and Sessions Judge and Spl.Judge for CBI cases, Bangalore.
A.1 & A.2 present.
Heard A.1 & A.2, as well as their Counsel. Heard learned Spl.P.P also on the quantum of sentence.
It is prayed by Spl.P.P representing the C.B.I. that the Court having found both A.1 & A.2 guilty of the offences, sentence in accordance with law be imposed on them. A.1 contends that he has acted in accordance with the norms 158 Spl.C.C.No.157/2001 and procedure to be followed for advancement of loan, etc. and he having held guilty for the technical offences committed by him he be shown maximum leniency. It is also contended by him that because of his advanced age he is suffering from ill health. A.2 contends that the loan has been cleared by him by selling his property and obtaining loan from the Company wherein he is now working. The delay caused here in concluding trial is also pleaded by the accused for showing leniency in imposing the sentence. All this is not a mitigating circumstance with regard to the quantum of sentence as those indulging in criminal activity for grabbing undeserved advantage are not entitled to any consideration on quantum of sentence, in my view.
Public funds have been misused here in committing the offences. A.1 being the Sr. Manager of the Bank has misused his official position. Prosecution has proved here that the acts of A.1 in disbursing loan, P.C advances etc., and availment of the same by A.2 were not negligent and irregular, but were deliberate & intentional. Looking to the circumstances of the case, nature and gravity of the offences committed by A.1 & A.2, I am of the view that it is not a fit 159 Spl.C.C.No.157/2001 case to show any kind of leniency in imposing the punishment. Further, looking to the facts and circumstances of the case, in my view, the Provisions of the Probation of Offenders Act also cannot be invoked. If any leniency is shown in such type of cases, in my view, a wrong message will go to the Society at large to the effect that it is possible to escape from the legal clutches even after committing such type of serious offences. Such a wrong message has got serious repercussions on the Society.
Keeping in mind all these aspects, on perusal of the circumstances of the case, age factor of the accused and also keeping in mind that to conclude this proceeding more than 15 years has taken place and upon hearing both A.1 & A.2, I proceed to pass the following :-
ORDER A.1 & A.2 are sentenced to undergo R.I for a period of Four (4) years and to pay a fine of Rs.50,000/-(Rs. Fifty Thousand only) each for the offence punishable u/s.420 of I.P.C. & in default of payment of the fine amount as imposed they shall suffer S.I for Six (6) months. For the offence committed u/s.13(2) r/w Sec.13(1)(d) of the P.C Act, A.1 is 160 Spl.C.C.No.157/2001 convicted to undergo R.I for Two (2) years and also to pay a fine of Rs.25,000/- (Rs. Twenty five Thousand only) & in case of default to pay fine amount as imposed he shall suffer S.I for Three (3) months.
Substantive Sentence of imprisonment imposed on the 1st accused shall run concurrently.
Bail bonds of the accused and their surety stands cancelled.
Furnish free copies of the Judgment to A.1 & A.2 immediately.
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(Dictated to the Stenographer, transcribed and computerized by him, corrected and then signed and pronounced by me in open court this the 31st day of August, 2016).
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(Pradeep.S.Balikai) XXXII Addl.City Civil and Sessions Judge and Spl.Judge for CBI cases, Bangalore.161 Spl.C.C.No.157/2001
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE PROSECUTION:
PW1 : B.K.Doreswamy
PW2 : D.Martin
PW3 : K.V.Kishore
PW4 : Prasanna Panicker
PW5 : M.S.Jayashree
PW6 : C.V.Lakshmi
PW7 : Arvind N Kulkarni
PW8 : A.R.Murthy
PW9 : B.K.Nagaraja Rao
PW10 : Bharathi Prabhakar
PW11 : G.G.Prasad
PW12 : A.S.Ramamurthy
PW13 : S.S.Kamat
PW14 : T.Ravikumar
PW15 : N.Subramani
PW16 : A.P.Srinivas
PW17 : P.Sethupathi
PW18 : V.Krishnan
PW19 : D.Nagaraja
PW20 : N.G.Gopanna
PW21 : V.S.Srinivasan
PW22 : M.Saravana Raj
PW23 : Ashok Chakrabarthy
162 Spl.C.C.No.157/2001
PW24 : K.V.Naresh, Advocate
PW25 : Ramakrishna
PW26 : Y.Badrinarayana
PW27 : S.B.Yuvaraj
PW28 : R.Kalia Moorthy
PW29 : M.S.Arunkumar
PW30 : K.A.Balachandar, Advocate
PW31 : G.V.U.N.Murthy
PW32 : A.V.Suryanarayana Rao
PW33 : Seethalakshmi
PW34 : Smt.Uma Vasanth
PW35 : M.Ramesh Reddy
PW36 : C.V.Prasad
PW37 : T.V.Sashikumar, I.O.
PW38 : K.Gopinathan, I.O.
PW39 : M.Jayachandran Raju, I.O.
LIST OF DOCUMENTS EXHIBITED FOR THE PROSECUTION:
Ex.P.1 : Sale Deed dt.16.11.1994 Ex.P.1(a) : Signature of P.W.1 Ex.P.1(b) : Signature of the Officer of BDA Ex.P.1(c) & (d) : L.T.Ms and signatures of P.W.1 Ex.P.2 : Cheque No.933275 dt.24.11.1994 Ex.P.2(a) &(b) : Signatures of A.3 Ex.P.2(c) : Signature of P.W.1 Ex.P.3 : Power of Attorney Ex.P.3(a) : Signature of P.W.1 Ex.P.3(b) to (d) : Signatures of P.W.1 163 Spl.C.C.No.157/2001 Ex.P.4 : Cheque No.707505 dt.20.12.1995 Ex.P.4(a) & (b) : Signatures of A.3 Ex.P.4(c) : Signature of P.W.1 Ex.P.5 : Xerox copy of the Revocation of the Power of Attorney dt.01.12.1994 Ex.P.6 : Sale Deed dt.22.05.1961 Ex.P.6(a) : Signature and LTM of Sri.Devaneson Samuel (Father of P.W.2) Ex.P.7 : Partition Deed dt.12.01.1995 Ex.P.7(a) : Signature of P.W.2 Ex.P.7(b) : Signature of D.Thomas Ex.P.7(c) : Signature of Mrs Mercy Ex.P.7(d) : Signature of Mrs Devakrubai Ex.P.8 : Form No.R.255 of Andra Bank Dt. 04.03.1997 Ex.P.8(a) : Signature of PW.2 Ex.P.9 : Stamp Paper containing Letter of Guarantee Ex.P.9(a) : Signature of P.W.2. Ex.P.10 : Form No.291-Letter of Guarantee Ex.P.10(a) Signature of P.W.2 Ex.P.11 : Letter Dt.03.03.1997 of PW.2 to Andhra Bank Ex.P.11(a) : Signature of P.W.2 Ex.P.12 : Loan Application of A.2 dt.08.11.1994 Ex.P.13 : Xerox copy of the Letter of Credit Ex.P.14 : Appraisal Report Ex.P.14(a) : Signature of A.1 Ex.P.15 : Letter dt. 15.11.1994 Ex.P.15(a) : Signature of A.1 Ex.P.15(b) : Signature of A.1 Ex.P.15(c) : Endorsement of A.1 Ex.P.16 : Office Note Dt. 12.11.1994 Ex.P.16(a) : Signature of A.1 Ex.P.17 : Office Note of Zonal Office dt.17.11.94 Ex.P.17(a) : Initials of Sri Bindu Madhava Ex.P.17(b) : Initials of P.W.4 Ex.P.17(c) : Endorsements of C.W.3 to (e) 164 Spl.C.C.No.157/2001 Ex.P.17(f) : Initials of C.W.3 to (h) Ex.P.18 : Sanction Letter Ex.P.18(a) : Signature of P.W.4 Ex.P.19 : Letter Dt.30.12.1994 Ex.P.19(a) : Signature of A.1 Ex.P.19(b) : Endorsement of C.W.3 Ex.P.19(c) : Initials of C.W.3 Ex.P.20 : Sanction Order Dt.30.12.1994 Ex.P.20(a) : Signature of C.W.3 Ex.P.21 : Letter Dt.2.3.1995 Ex.P.21(a) : Signature of A.1 Ex.P.22 : Letter Dt. 8.3.1985 Ex.P.22(a) : Signature of P.W.4 Ex.P.23 : Letter Dt.10.3.1995 Ex.P.23(a) : Signature of A.1 Ex.P.24 : Mail sent by Zonal Office Ex.P.25 : Letter Dt.28.2.1995 Ex.P.25(a) : Signature of A.1 Ex.P.26 : Mail sent by Zonal Office Ex.P.27 : Letter Dt.5.5.1995 Ex.P.27(a) : Signature of A.1
Ex.P.27(b) : Endorsement of Bindu Madhav Rao Ex.P.27(c) : Initials of Bindu Madhav Rao Ex.P.27(d) : Endorsement of PW.4 Ex.P.27(e) : Initials of P.W.4 Ex.P.27(f) : Initials of Chief Manager Ex.P.28 : Copy of the Letter dt.14.06.1995 Ex.P.28(a) : Initial of P.W.4 Ex.P.29 : Copy of the Letter dt. 1.6.1995 Ex.P.29(a) : Initials of A.1 Ex.P.30 : Letter Dt. 09.08.1995 Ex.P.30(a) : Endorsement Ex.P.30(b) : Initials of P.W.4 Ex.P.31 : Office copy of the Letter Dt. 5.9.1995 Ex.P.31(a) : Initials of P.W.4 Ex.P.32 : Letter Dt. 04.07.1995 Ex.P.32(a) : Signature of A.1 Ex.P.32(b) : Endorsement Ex.P.32(c) : Initials of PW.4 Ex.P.33 : Letter Dt.4.7.1995 165 Spl.C.C.No.157/2001 Ex.P.33(a) : Signature ofA.1 Ex.P.33(b) : Endorsement of PW.4 Ex.P.34 : Letter Dt. 19.9.1995 Ex.P.34 (a) : Endorsement of PW.4 Ex.P.34(b) : Initials of PW.4 Ex.P.35 : Office copy of the letter Dt. 25.9.95 Ex.P.35(a) : Initials of PW.4 Ex.P.36 : Copy of the letter Dt. 25.9.95 Ex.P.36(a) : Initials of N.Subbappaiah Ex.P.37 : Office copy of the letter Dt. 15.7.95 Ex.P.37(a) : Initials of A.1 Ex.P.38 : Office copy of letter Dt. 27.11.95 Ex.P.38(a) : Signature of Chief Manager Sri.N. Subbappaiah Ex.P.39 : Fax Massage Dt. 6.6.1996 Ex.P.39(a) : Endorsement on Ex.P.39 Ex.P.40 : Xerox copy of the Inspection Report Dt. 15.10.1995 (in 9 sheets) Ex.P.41 : Debit Voucher Ex.P.41(a) : Signature of Smt Uma Vasanth Ex.P.42 : Credit Voucher dt. 20.4.1995 Ex.P.42(a) : Signatures of Smt. Uma Vasanth & (b) Ex.P.43 : Original Ledger Sheets in respect of Current A/c 972 of A.2 Ex.P.43(a) : Relevant Entries with signature of Smt. to (c) Uma Vasanth Ex.P.43(d) : Relevant Entry Ex.P.44 : Debit Voucher dt. 1.6.1995 Ex.P.45 : Page No.20 in Banking Credit Register Ex.P.45(a) : Relevant Entry Ex.P.46 : Letter Dt. 15.10.97 Ex.P.47 : Letter Dt. 20.10.1997 Ex.P.48 : Interrogation Report (in 62 sheets) Ex.P.48(a) : Signature of P.W.9 Ex.P.48(b) : Signature of PW.36 Ex.P.49 : Attested copy of Register of Deposit of Title Deeds Ex.P.49(a) : Signature of PW.10 Ex.P.50 : Letter Dt. 2.5.2001 Ex.P.50(a) : Signature of PW.11 166 Spl.C.C.No.157/2001 Ex.P.51 : Statement of A/c Ex.P.51(a) : Signature of PW.11 Ex.P.51(b) : Signature of PW.11 Ex.P.52 : Letter Dt. 1.5.2001 Ex.P.53 : Pay Order Dt. 30.11.1994 for Rs.
3,00,000/-
Ex.P.54 : Pay Order Dt. 30.11.1994 for Rs.
1,00,100/-
Ex.P.55 : Debit Voucher Dt. 8.8.1996
Ex.P.55(a) : Signature of A.1
Ex.P.56 : Credit Voucher Dt. 8.8.96 (Sundry
Debtor's General A/c)
Ex.P.56(a) : Signature of A.1
Ex.P.57 : Xerox Copy of letter Dt 3.11.94 with
endorsement
Ex.P.58 to 62 : Xerox copies of Stock Statements of M/s JJ Fashion Studio(P) Ltd.
Ex.P.63 to 66 : Four Demand Drafts Dt.13.11.94,5.12.94,5.1.95 & 7.3.95 Ex.P.67 : Demand Draft Dt. 18.7.95 Ex.P.68 to 70 : Three Demand Drafts Dt. 30.11.94, 3.1.95 & 18.7.95 for Rs.2,00,000/-, 1,00,000/- & Rs. 1,00,000/-
respectively Ex.P.71 : Current A/c opening Form of A.2 Co. Ex.P.72 : Attested copies of Stock Statements of M/s JJ Fashion Studio(P) Ltd(3 sheets) Ex.P.73 : Attested copy of Stock Statement of M/s J.J.Fashion Studio(P) Ltd.
Ex.P.74 : Demand Draft No.009132 Dt. 18.7.1995 Ex.P.75 : Demand Draft No.979457 Dt. 3.1.95 Ex.P.76 : Demand Draft No.979460 Dt. 3.1.95 Ex.P.77 : Demand Draft No.979458 Dt. 3.1.95 Ex.P.78 : Demand Draft No.008639 Dt. 8.3.95 Ex.P.79 : Demand Draft No.008703 Dt. 23.3.95 Ex.P.80 : Demand Draft No.008893 Dt. 12.5.95 Ex.P.81 : Demand Draft No.009053 Dt.22.6.1995 Ex.P.82 : Demand Draft No.009131Dt.18.7.95 Ex.P.83 : Demand Draft No.009051 Dt.22.6.95 Ex.P.84 : Xerox copy of Debitor's Register Extract (3 sheets) 167 Spl.C.C.No.157/2001 Ex.P.84(a) : Signature of PW.23 Ex.P.85 : Xerox copy of Invoice cum Gate pass Ex.P.86 : Letter to the C.B.I. Dt. 13.3.2001 Ex.P.87 : Office copy of legal opinion Ex.P.88 : Letter Dt. 18.7.01 Ex.P.88(a) : Signature of PW.25 Ex.P.89 : Statement of A/c of Sri D.Martin Ex.P.89(a) : Signature of PW.25 Ex.P.90 : Demand Draft No.009050 Dt.22.6.95 Ex.P.91 : Demand Draft No.009130 Dt.18.7.95 Ex.P.92 : Demand Draft No.009162 Dt.31.7.95 Ex.P.93 : Xerox copy of the Report of PW.28 Ex.P.94 : Xerox copy of Inspection Report of PW.29 (9 sheets) Ex.P.94(a) : Seal & Signature of Chartered Accountant Ex.P.95 : Covering Letter Ex.P.95(a) : Signature of PW.29 Ex.P.96 : Legal Opinion Dt.29.11.94 Ex.P.97 : Letter of P.W.30 Dt.24.5.01 to the CBI Ex.P.97(a) : Signature of PW.30 Ex.P.98 : Complaint Dt. 29.9.99(2 sheets) Ex.P.98(a) : Signature of PW.31 Ex.P.99 : Sanction Order Dt. 28.8.01 Ex.P.99(a) : Signature of PW.32 Ex.P.100 : Pay-in-slip Dt. 29.11.94 (Challan) Ex.P.100(a) : Signature of PW.33 Ex.P.101 : Cheque No. 079651 Dt.30.11.94 Ex.P.102 : Cheque No. 79653 Dt. 5.1.95 for Rs.50,000/-
Ex.P.103 : Cheque No. 79666 Dt.5.1.95 for Rs.75,000/-
Ex.P.104 : Cheque No.174352 Dt.26.5.95 for Rs.20,000/-
Ex.P.105 : Cheque No.174356 Dt. 29.5.95 for Rs.30,000/-
Ex.P.106 : Cheque No. 174358 Dt.30.5.95 for Rs.85,000/-
Ex.P.107 : Cheque No. 79654 Dt.2.12.94
Dt.2.12.94 for Rs.3,00,250/-
Ex.P.108 : Draft Application Form Dt. 2.12.94
168 Spl.C.C.No.157/2001
Ex.P.109 : Draft Application Form Dt. 2.12.94
Ex.P.110 : Debit Voucher Dt. 26.5.94
Ex.P.111 : Credit Voucher Dt. 26.5.95
Ex.P.112 : Debit Voucher Dt. 29.5.95
Ex.P.113 : Credit Voucher Dt.29.5.95
Ex.P.114 : Debit Voucher Dt.10.3.95
Ex.P.115 : Debit Voucher Dt. 11.3.95
Ex.P.116 : Debit Voucher Dt. 20.3.95
Ex.P.117 : Debit Voucher Dt. 22.3.95
Ex.P.118 : Debit Voucher Dt. 19.4.95
Ex.P.119 : Debit Voucher Dt.10.5.95
Ex.P.120 : Foreign Documentary Bill Register
Ex.P.120(a) : Relevant entries at Page Nos.5,6,8 & 9
to (d) Dt. 22.6.95, 17.7.95, 28.7.95 & 31.7.95
respectively
Ex.P.120(e) : Page 20 Dt. 10.3.96
Ex.P.121 to 128 : Xerox copies of Foreign Documentary Bills Register Ex.P.129 : Foreign Exchange Bill No.337074 (8 sheets) Ex.P.130 : Foreign Exchange Bill No. C-337075 Dt.21.3.95 Ex.P.131 : Foreign Exchange Bill No. C-337079 Dt.23.3.95 Ex.P.132 : Foreign Exchange Bill No. C 337098 Dt.8.4.95 Ex.P.133 : Foreign Exchange Bill No. C 337111 Dt.20.4.95 Ex.P.134 : Foreign Exchange Bill No. C 337116 Dt.27.4.95 Ex.P.135 : Investigation Report of P.W.36 File No-
I Dt. 7.12.1999
Ex.P.135(a) : Signature of P.W.36
Ex.P.136 : File No.II part of Investigation Report of
Ex.P.36
Ex.P.137 : FIR
Ex.P.137(a) : Signature of P.W.37
Ex.P.138 : Letter Dt. 19.4.2000
Ex.P.138(a) : List of Documents
Ex.P.139 : On Demand Promissory Note
Dt.31.12.94
169 Spl.C.C.No.157/2001
Ex.P.140 : Packing Credit Agreement Dt. 13.11.95
Ex.P.141 : Packing Credit Agreement
Ex.P.142 : On Demand Promissory Note Dt.
13.11.95
Ex.P.143 : Bill Purchase Agreement
Ex.P.144 : Letter of Guarantee
Ex.P.145 : Extracts from the Minutes of Board
Meeting
Ex.P.146 : Limit Cancellation Letter Dt.13.11.95
Ex.P.147 : Letter Dt.30.11.90 executed by GPA
holder of Mr.B.K.Doreswamy
Ex.P.148 : On Demand Promissory Note Dt.
30.11.94
Ex.P.149 : Packing Credit Agreement Dt. 30.11.94
Ex.P.150 : Form No. RF 298 Dt. 30.11.94
Ex.P.151& 152 : Two Letters of Guarantee both Dt.
30.11.94
Ex.P.153 & 154 : Two Affidavits Dt.3.9.96 Ex.P.155 : Public Notice in "Deccan Herald"
Ex.P.156 : Public Notice in "Kannada Prabha"
Ex.P.157 : Xerox copy of Legal Notice Dt. 17.6.97 Ex.P.158 : Reply Notice Dt. 29.9.97 Ex.P.159 : Copy of Legal Notice Dt.11.7.97 Ex.P.160 : Reply Notice Dt. 16.8.97 Ex.P.161 : Legal Notice Dt. 20.8.97 Ex.P.162 : Statement of Accounts relating to P.C No.2/95-96 & others relating to Packing Credits Ex.P.163 : Statement of Loan A/c Ex.P.164 : Statement of A/c from 1.4.97 to 30.9.97 Ex.P.165 : Statement of A/c of A.2 from 1.7.97 to 26.7.98 Ex.P.166 : Partnership Letter Ex.P.167 : Xerox copy of Approval of Import & Export Report Ex.P.168 : Xerox copy of Property Statement of Mrs Joseph Ex.P.169 : Xerox copy of Property Statement of F.D.Bosco Ex.P.170 : Xerox copy of the letter Dt.15.7.95 170 Spl.C.C.No.157/2001 Ex.P.171 : Receipt Memo Dt.17.7.2000 Ex.P.171(a) : Signature of PW37 Ex.P.172 : Credit Voucher Dt. 30.11.94 Ex.P.173 : Cheque Dt.30.11.94 Ex.P.174 : Credit Voucher Dt. 31.12.94 Ex.P.175 : Cheque Dt. 30.12.94 for Rs.9,50,725/-
No.0799662
Ex.P.176 : Cheque No.079672 Dt.10.1.95
Ex.P.177 : Cheque No.079676 Dt.13.1.95
Ex.P.178 : Cheque No.079678Dt.13.1.95
Ex.P.179 : Cheque No.087401 Dt.22.2.95
Ex.P.180 : Cheque No.087408 Dt. 23.2.95
Ex.P.181 : Transfer Credit Voucher Dt.7.3.95
Ex.P.182 : Cheque No.14045 Dt.7.3.95
Ex.P.183 : Transfer Credit Order Dt. 8.3.95
Ex.P.184 : Cheque No. 087414 Dt.8.3.95
Ex.P.185 : Transfer Debit Voucher Dt. 10.3.95
Ex.P.186 : Cheque No.087415 Dt.10.3.95
Ex.P.187 : Cheque No.087412 Dt.7.3.95
Ex.P.188 : Transfer Credit Voucher Dt.11.3.95
Ex.P.189 : Cheque No.087425 Dt. 14.3.95
Ex.P.190 : Transfer Credit Voucher Dt.14.3.95
Ex.P.191 : Transfer Credit Voucher Dt. 23.2.95
Ex.P.192 : Cheque No.172626 Dt.22.3.95
Ex.P.193 : Cheque No. 544809 Dt.6.4.95
Ex.P.194 : Transfer Credit Voucher Dt.xxx
Ex.P.195 : Transfer Credit Voucher Dt.5.5.95
Ex.P.196 : Cheque No.544861 Dt.6.5.95
Ex.P.197 : Cheque No.544866 Dt. 8.5.95
Ex.P.198 : Transfer Credit Voucher Dt.10.5.95
Ex.P.199 : Cheque No. 544883 Dt. 16.5.95
Ex.P.200 : Cheque No. 174359 Dt.31.5.95
Ex.P.201 : Cheque No.174384 Dt.13.6.95
Ex.P.202 : Cheque No.174391 Dt. 15.6.95
Ex.P.203 : Cheque No.17801 Dt. 22.6.95
Ex.P.204 : Transfer Credit Voucher Dt. Dt. 22.6.95
Ex.P.205 : Cheque No. 175817 Dt. 23.6.95
Ex.P.206 : Cheque No.175822 Dt. 29.6.95
Ex.P.207 : Self Cheque No. 175831 Dt. 7.7.95
Ex.P.208 : Cheque No. 175845
Ex.P.209 : Transfer Credit Voucher Dt. 18.7.95
171 Spl.C.C.No.157/2001
Ex.P.210 : Cheque No. 947651 Dt. 18.7.95
Ex.P.211 : Cheque No. 947652 Dt.18.7.95
Ex.P.212 : Cheque No.947682
Ex.P.213 : Cheque No. 947681 Dt. 27.5.95
Ex.P.214 : Transfer Credit Voucher Dt. 28.7.95
Ex.P.215 : Cheque No. 947688 Dt. 29.7.95
Ex.P.216 : Transfer Credit Voucher Dt. 31.7.95
Ex.P.217 : Cheque No.947690 Dt. 31.7.95
Ex.P.218 : Cheque No.947689 Dt. 29.7.95
Ex.P.219 : Cheque No.917512 Dt. 24.8.95
Ex.p.220 : Transfer Credit Voucher Dt. 30.8.95
Ex.P.221 : Cheque No. 917535 Dt. 1.9.95
Ex.P.222 : Cheque No.710336 Dt. 30.9.95
Ex.P.223 : Transfer Credit Voucher Dt. 30.3.96
Ex.P.224 : Transfer Credit Voucher Dt.15.5.96
Ex.P.225 : Cheque No.917563 Dt.16.5.96
Ex.P.226 : Cheque No. 917564 Dt. 18.5.96
Ex.P.227 : Cheque No.917574 Dt. 22.5.96
Ex.P.228 : Letter Dt.818100
Ex.P.229 : Office copy of the Letter Dt. 14.11.94
Ex.P.230 : Xerox Copy of Property Statement of
Smt. Jayamani Joseph
Ex.P.230(A) : Xerox Copy of Property Statement of Sri
F.D.Bosco
Ex.P.230(B) : Xerox Copy of Property Statement of Sri
A.H.Marvel Joseph
Ex.P.230(C) : Xerox Copy of the Property Statement
of Sri Gajanan
Ex.P.231 : Receipt Memo Dt. 17.1.01
Ex.P.231(a) : Signature of P.W.37
Ex.P.232 : DD Application Form Dt. 18.7.95
Ex.P.233 : DD Application Dt. 27.7.95
Ex.P.234 : Appln for issue of Pay Order Dt. 25.8.95
Ex.P.234(a) : Pay Order No.712952
Ex.P.235 : Appln for purchasing Pay Order
Dt.1.9.95
Ex.P.235(a) : Pay order No. 712978
Ex.P.236 & 237 : Two pay order challans Dt. 31.12.94 Ex.P.236(a) & : Two Pay orders 237(a) Ex.P.238 : Appln for Pay Order Dt. 8.3.95 172 Spl.C.C.No.157/2001 Ex.P.238(A) : Pay Order No.322570 Ex.P.239 : Appln for Pay Order Dt. 8.3.95 Ex.P.240 : Appln for Pay order Dt. 31.5.95 Ex.P.241 : Appln for Pay Order Dt. 39.6.95 Ex.P.242 : Appln for Pay Order Dt. 31.5.95 Ex.P.243 : Appln for Pay Order Dt. 31.7.95 Ex.P.244 : Letter Ex.P.244(a) : Signature of P.W.37 Ex.P.245 : Demand Draft Dt. 22.6.95 Ex.P.246 : Demand Draft Dt. 31.7.95 Ex.P.247 : Demand Draft Dt. 1.8.95 Ex.P.248 : Receipt memo Ex.P.249 : Shipment Airway Bill (total 19 documents in 26 sheets) Ex.P.250 : Receipt Memo Ex.P.250(a) : Signature of P.W.37 Ex.P.251 : Receipt Memo Ex.P.251(a) : Signature of P.W.37 Ex.P.252 : Documents pertaining to Export Bill No.C 337102(10 sheets) Ex.P.253 : Three Applications and one request for Advance (6 sheets) Ex.P.254 : Seizure Memo Ex.P.54(a) : Signature of P.W.37 Ex.P.255 : Invoice Ex.P.256 : Invoice Ex.P.257 : Invoice Ex.P.258 : Seizure Memo Ex.P.258(a) : Signature of P.W.37 Ex.P.259 to 278 : Office copies of the Invoices Ex.P.279 : Letter Ex.P.280 : Letter Dt. 22.2.2001 Ex.P.281 : Letter Dt. 3.3.2001 Ex.P.282 : Current A/c Opening Form Ex.P.283 : Letter Dt. 14.11.94 Ex.P.284 : Seizure memo dt.9.3.2001 Ex.P.284(a) : Signature of P.W.37 Ex.P.285 : Seizure Memo Dt. 9.3.2001 Ex.P.285(a) : Signature of P.W.37 Ex.P.286 : Memorandum and Articles of Association (Booklet) 173 Spl.C.C.No.157/2001 Ex.P.287 : Packing Credit Register Ex.P.287(a) : Relevant Entry at page no.60 Ex.P.287(b) : Relevant Entry at page no.61 Ex.P.287(c) : Relevant Entry at page no.68 Ex.P.288 : Packing Credit Register Ex.P.288(a) : Relevant Entry at page no.21 Ex.P.288(b) : Relevant Entry at page no.6 Ex.P.288(c) : Relevant Entry at page no.7 Ex.P.288(d) : Relevant Entry at page no.8 Ex.P.288(e) : Relevant Entry at page no.10 Ex.P.289 : Certificate of Registration of Mortgage etc., Dt. 30.6.95 Ex.P.290 : Debit Voucher Dt. 31.12.94 Ex.P.291 : Debit Voucher Dt. 7.3.95 Ex.P.292 : Debit Voucher Dt. 8.3.95 Ex.P.293 : Debit Voucher Dt. 22.6.95 Ex.P.294 : Debit Voucher Dt. 18.7.95 Ex.P.295 : Debit Voucher Dt. 28.7.95 Ex.P.296 : Debit Voucher Dt. 31.7.95 Ex.P.297 : Debit Voucher Dt. 30.3.94 Ex.P.298 : Debit Voucher Dt. 15.3.96 Ex.P.299 : Debit Voucher Dt. 16.1.96 Ex.P.300 : Credit Voucher Dt.16.1.96 Ex.P.301 : Letter Dt. 1.3.01 of Andra Bank Ex.P.302 : Letter Dt. 13.3.01 of S.S.Industrial Consultants Ex.P.303 : Valuation Report Dt. 27.3.97 Ex.P.304 : Certified copy of Manual of Instruction of Andhra Bank LIST OF M.Os MARKED FOR THE PROSECUTION SIDE:
- NIL -
LIST OF WITNESSES EXAMINED FOR THE DEFENCE SIDE:
-NIL-174 Spl.C.C.No.157/2001
LIST OF DOCUMENTS EXHIBITED FOR THE ACCUSED:-
Ex.D.1 : Certified copies of the Judgment and
Decree in OS 8780/1997
Ex.D.2 : Certified copy of the compromise
petition and order in O.A.148/1998
Ex.D.3 : Signature of P.W.2 in Ex.P.10
Ex.D.4 : Certified copies of the Judgment &
Decree in OS 4934/1998
Ex.D.5 : Voucher Dt. 15.12.1994
Ex.D5(a) : Signature of P.W.1
Ex.D.6 : Voucher Dt. 23.3.1997
Ex.D.6(a) : Signature of P.W.2
Ex.D.7 : Certified Copy of Order Sheet in
CC No.733/2002
(Pradeep.S.Balikai)
XXXII Addl.City Civil and
Sessions Judge and Spl.Judge for
CBI cases, Bangalore.
175 Spl.C.C.No.157/2001
31.08.2016
A.1 - by Sri.BSB
A.2 - by Sri.TMS
A.3 - In person
For Judgment
All the accused Pr.
Judgment pronounced in the
open court,vide separate Order with
the following operative portion.
176 Spl.C.C.No.157/2001
ORDER
Acting u/s.235 (1) Cr.P.C. A.1
& A.2 are acquitted of the offence
punishable u/s.109 of IPC and A.3 is
acquitted of the offence u/s.109
r/w. Sec.420 of IPC.
A.3 is set at liberty.
Acting u/s.235(2) Cr.P.C. A.1 is
convicted of the offences punishable
u/s.420 of IPC & u/s.13(2) r/w
Sec.13(1)(d) of The Prevention of
Corruption Act, 1988 and A.2 is
convicted of the offence punishable
u/s.420 of IPC.
On hearing, A.1 & A.2 are
sentenced to undergo R.I for a
period of Four (4) years and to pay a
fine of Rs.50,000/-(Rs. Fifty
Thousand only) each for the offence
punishable u/s.420 of I.P.C. & in
default of payment of the fine
amount as imposed they shall suffer
S.I for Six (6) months. For the
offence committed u/s.13(2) r/w
Sec. 13(1)(d) of the P.C Act, A.1 is
177 Spl.C.C.No.157/2001
convicted to undergo R.I for Two (2)
years and also to pay a fine of
Rs.25,000/- (Rs. Twenty five
Thousand only) & in case of default
to pay fine amount as imposed he
shall suffer S.I for Three (3) months.
Substantive Sentence of
imprisonment imposed on the 1st
accused shall run concurrently.
Bail bonds of the accused and
their surety stands cancelled.
Furnish free copies of the
Judgment to A.1 & A.2 immediately.
XXXII Addl.City Civil & Sessions Judge,
& Spl.Judge for CBI Cases,
Bangalore.