Bangalore District Court
Cbi Acb Bangalore vs Pranab Kumar Roy on 22 December, 2025
KABC010019792015
IN THE COURT OF XXI ADDL.CITY CIVIL AND
SESSIONS JUDGE AND PRINCIPAL SPECIAL JUDGE
FOR CBI CASES, BENGALURU [CCH-4]
PRESENT: SRI.MANJUNATH SANGRESHI
B.A.LL.B [HONS.]
XXI Addl.City Civil & Sessions Judge and
Principal Special Judge for CBI Cases
[CCH-4] Bengaluru.
DATED THIS 22ND DAY OF DECEMBER 2025
Spl.C.C.No.37/2015
Complainant : The State by CBI/ACB,
Bengaluru.
[By Public Prosecutor]
V/S.
Accused 1 : Sri. PRANAB KUMAR ROY
S/o. Late Sri.Banindra Kumar
Roy, Aged about 74 years
Retd. General Manager
United Bank of India,
Head Office, Kolkata,
R/o. P-66, Lake Town,
Block-B First Floor,
Podder Prem,
Kolkata-700089.
Also at PO Sahisherpur,
2 Spl.CC.No.37/2015
VILL Sahapara District,
Murshidabad,
West Bengal.
2: M/s. BINARY SPECTRUM
SOFTECH PVT. LTD.
Khykha Court, No.4/5,
2nd Floor, 1st Cross,
Hosur Main, Madiwala,
Bangalore-560 068.
3: Sri. D. RAVI KUMAR,
S/o Sri. K. Doraiswamy
Aged about 57 years
No.E-1201, Mantri Elegance
Apartments, N.S. Palya,
Bannerghatta Road,
Bangalore-560 076.
Also at No.169-E, Bilekahalli
Main Road, Bannerghatta Road,
IIM Post, Bangalore-560076.
[Accused No.1 by Sri.Gururaj Joshi
Adv. and Accused No.3 by Sri.
S.H.Mane Adv.]
[Accused No.2 is a Company,
Un-represented]
Particulars regarding date of commission of offence, report
of offence, arrest of accused & Etc,.
Date of commission of From 2009 to 2013 [As per
offence FIR]
Date of report of offence 13.12.2013
Date of arrest of accused Not Arrested
Date of release of accused ---------
on bail
Total period of custody ---------
3 Spl.CC.No.37/2015
Name of the complainant Sri. D. Sinha,
Chief Regional Manager,
United Bank of India,
Regional Office,
K.G.Road, Bengaluru
Date of commencement of 10.07.2015
recording evidence
Date of closing of evidence 16.09.2019
Charge-sheeted offences Section 120-B and 420 of
Indian Penal Code and
Sec.13(2) r/w. 13(1)(d) of
Prevention of Corruption
Act, 1988.
Opinion of the Judge As per Final Order
JUDGMENT
Sri.S.Ramesh, the Inspector of Police, Central Bureau of Investigation ['CBI' in short], Anti Corruption Branch ['ACB' in short] Bengaluru, has submitted a charge sheet against accused No.1 to 3, alleging the commission of offences punishable U/Sec.120-B and 420 of Indian Penal Code ['IPC' in short] and U/Sec.13(2) r/w. 13(1)(d) of the Prevention of Corruption Act-1988 ['PC Act' in short].
The Facts of Prosecution Case:
2. It is the prosecution case that accused No.3-
D.Ravi Kumar, had approached United Bank of India, 4 Spl.CC.No.37/2015 Bengaluru Branch, Bengaluru requesting for Credit Facilities for the Company by name M/s. Binary Spectrum Softech Pvt. Ltd., [i.e. accused No.2]; and he applied for Term Loan of Rs.14 Crores and Working Capital of Rs.2 Crores for financing to Software Capital Product 'MEDITS' worth of Rs.18.17 Crores from M/s.Optech Consulting Inc. Texas, USA, by providing collateral security of the proposed property situated at Sy.No.145, Amani Belandur, Varthur Hobli, Bengaluru, measuring 43560 Sq.Ft. which is being acquired by accused No.2-Company.
3. It is the further case of prosecution that the credit proposal of accused No.2-Company was processed by Sri.K.R.Tamil Selvan, the Chief Manager and Sri.T.S.Sudarshan, the Senior Manager of the Branch and during the processing period, Sri.Arupendu Banerjee, then Chief Manager and Sri.K.R.Tamil Selvan had inspected the said proposed property bearing Sy.No.145, Amani Belandur, Varthur Hobli, Bengaluru, but had not enquired about the mortgage value of the landed property to cross check the value quoted by 5 Spl.CC.No.37/2015 Srikrishna, Penal Valuer and submitted no adverse report dated 03.10.2009. Thereafter, Sri.K.R.Tamil Selvan and Sri.T.S.Sudarshan had initiated the process note of credit proposal of accused No.2-company by stipulating various terms and conditions and submitted to Sri.C.Balachandran, Assistant General Manager of Southern Regional Office, Chennai. Further, Sri.C.Balachandran had signed the process note in the capacity of Recommending Authority; thereafter, the loan proposal was placed before the Regional Credit Committee comprising of Sri.R.Annachamy, Sri.M.K.Raman and Sri.N.Seetharaman. The Regional Credit Committee approved the proposal for sanctioning the term loan of Rs.14 Crores for the purpose of acquiring software product and the same was sanctioned by accused No.1-Pranab Kumar Roy, in the capacity as Sanctioning Authority.
4. It is the further case of the prosecution that, the accused No.3-D.Ravi Kumar had intimated to Sri.K.R.Bhaskaran, then Chief Manager, United Bank of India Bengaluru Branch that, due to pending clearance 6 Spl.CC.No.37/2015 from local revenue department and due to delay of registration process, the proposed collateral property bearing Sy.No.145, Amani Belandur, Varthur Hobli, Bengaluru could not be purchased and he requested to accept the property situated at Sy.No.110, Doddathogur Village, Bengaluru measuring 36 guntas, worth of Rs.9.80 Crores as collateral security in place of property at Sy.No.145, Amani Belandur, Varthur Hobli, Bengaluru and assured to arrange additional property worth of Rs.6.30 Crores in couple of months time; and in the meanwhile, accused No.3 would arrange fixed deposit of Rs.6.20 crores from his personal source in United Bank of India, which will be in lien till collateral security of equivalent value is arranged. Thereafter, Sri.K.R.Bhaskaran had forwarded the request of accused No.3 to Southern Regional Office, Chennai.
5. It is the further case of prosecution that, the request of accused No.3 was processed at Southern Regional Office, Chennai by Sri.K.R.Tamil Selvan, Chief Manager and submitted note regarding modification in the terms and conditions of the sanction in respect of 7 Spl.CC.No.37/2015 substitution of securities which was recommended by Sri.C.Balachandran, Assistant General Manager that keeping in view the fact that there is no dilution in security and for all liquid security in the nature of fixed deposits to the tune of Rs.6.31 Crores albeit temporarily and the same was approved by the Regional Credit Committee comprising of Sri.L.Anbalagan, Manager (Advance), Sri. R. Annachamy, Senior Manager (Advance) and Sri.Pranab Kumar Roy i.e., accused No.1, has accorded sanction of the modification of earlier sanction dated 26.11.2009.
6. It is the further case of prosecution that, the property at Sy.No.110, Doddathoguru Village, Bengaluru measuring 36 guntas was created registered mortgage at Sub-Registrar Office, Begur by accused No.3 with United Bank of India on 31.12.2009 and accused No.3 Sri.D.Ravi Kumar also had arranged for fixed deposit of Rs.6.31 Crores with United Bank of India, Bengaluru Branch and the same was pledged under Bank's lien on 07.01.2010. Further, a total amount of loan of Rs.13,66,56,775/- was released in 5 stages between 8 Spl.CC.No.37/2015 08.01.2010 and 04.02.2010 and remitted to the beneficiary customer No.773210976 - M/s. Optech Consulting Inc, Texas, USA through RTGS.
7. Further, it is the case of prosecution that, on 25.03.2010, the accused No.3-D.Ravikumar has provided additional landed property situated at Sy.No.95, Anjanapura Village, Bengaluru measuring 1 acre which is valued by Sri. Srikrishna for Rs.7.84 Crores at the rate of Rs.1800/- per sq.ft and the same was created equitable mortgage with United Bank of India Bengaluru on 26.03.2010 with the approval of accused No.1-Pranab Kumar Roy and thereafter, the Bank's lien on FD of Rs.6.31 Crores was released.
8. It is the further case of prosecution that, the accused No.2-Company had serviced installment and interest of term loan up to September, 2011 and interest in the cash credit up to December 2011 with the balance outstanding of Rs.12.61 Crores. That on the request of accused No.3, the loan account was restructured by a committee of members by restructuring of over all limit from existing Rs.16 Crores to Rs.12.82 Crores. That even 9 Spl.CC.No.37/2015 after restructuring of the loan account, the accused No.3 Sri.D.Ravikumar had willfully defaulted repayment schedule and the account became NPA on 25.10.2012 with outstanding balance with interest of Rs.13,53,39,706/- as on 30.09.2012.
9. It is the further case of prosecution that, during July 2012, United Bank of India, while taking action for sale of both collateral properties, got valued said properties through M/s. S & V Engineering Enterprises, Bengaluru who had valued at the rate of Rs.850/- per Sq.Ft. for both properties, which is far less than the earlier valuation at the rate of Rs.2,500/- during 2009 and Rs.1,800/- during 2010, respectively. That accused No.3-D.Ravi Kumar, knowing fully well about the fact that the valuation of both properties provided as collateral security is over-valued submitted false information by suppressing the real facts; and also colluded with accused No.1-Pranab Kumar Roy in getting the loan sanctioned for his company by name M/s.Binary Spectrum Softech Pvt. Ltd., Bengaluru and also to his own company M/s. Acropetal Technologies Pvt. Ltd., 10 Spl.CC.No.37/2015 Bengaluru, held at State Bank of Travancore and United Bank of India.
10. It is the further case of prosecution that, the bribe amount of Rs.7 Lakhs was paid to accused No.1- Pranab Kumar Roy by accused No.3-D.Ravi Kumar through middlemen namely Sri.Arup Kumar Ghose, Sri.Gourav Pradhan and Sri.Debasis Das in the mid November, 2009. Thus, the accused No.1-Pranab Kumar Roy, while working as Chief Manager at Southern Regional Office, United Bank of India, Chennai and accused No.2 M/s.Binary Spectrum Softech Pvt Ltd., Bengaluru, represented by its Director Sri.D.Ravikumar and accused No.3-D.Ravikumar have conspired with each other and thereby cheated the United Bank of India and thereby the accused No.1 to 3 are said to be committed the Charge-Sheeted offences punishable U/Sec. 120-B, and 420 of IPC and U/Sec. 13(2) r/w. 13(1)(d) of P.C.Act.
11. After submitting Charge-Sheet, this court had taken cognizance of the offences against accused No.1 to 3 for the offences punishable U/Sec.120-B and 420 of IPC and cognizance is also taken for the offence 11 Spl.CC.No.37/2015 punishable U/Sec.13(2) r/w. 13(1)(d) of PC Act against accused No.1. The Summons were issued to the accused. After service of summons, the accused Nos.1 to 3 appeared before the court through their respective counsels and they were enlarged on bail. The copy of Charge-Sheet and other materials have been provided to accused as required under Section 207 of Cr.P.C.
12. It is relevant to note here that, earlier the accused No.2-Company was represented by accused No.3. But subsequently, the accused No.3 submitted his inability to represent the accused No.2-Company in view of his disqualification as Director from accused No.2- Company. Therefore, this court vide order dated:08.06.2023, by exercising the power U/Sec.305(4) of Cr.P.C., ordered that the case would be proceeded against accused No.2-Company as per the provision of said section.
13. After hearing both side regarding framing of charge, the charges were framed against the accused Nos.1 to 3 for the offences punishable under Section 120- B and 420 of IPC and also charge for the offence 12 Spl.CC.No.37/2015 U/Sec.13(2) r/w.13(1)d) of PC Act was framed against accused No.1. After framing of charges, the accused pleaded not guilty and claimed to be tried.
14. In order to prove the case against accused persons, the prosecution has examined 43 witnesses as per PW.1 to PW.43 and also got marked 135 documents as per Ex.P1 to P.135. During the evidence of PW.3, Ex.D1 to D3 are marked and further, Ex.D4 to D9 are marked with consent. After closing the prosecution side evidence, the statement of accused was recorded as provided U/Sec. 313 of Cr.P.C. The accused have denied the incriminating circumstances found against them in the prosecution evidence. After recording the statement of accused, the accused have filed written statement U/Sec.313(5) of Cr.P.C.
15. The Ld. Senior Public Prosecutor has relied upon the following case authorities.
1. State of MP Vs. Ram Singh [(2000) 5 SCC 88]
2. State of Maharashtra through CBI and the Corruption Branch Mumbai vs. Balakrishna Dattatreya Kumar [2012 (12) SCC 384] 13 Spl.CC.No.37/2015
3. Neeraj Dutta vs. State (NCT of Delhi) 2003(4) SCC 731
4. Sharadchandra Vs. State of Maharashtra AIR 1984 SC 1622
16. The learned counsel for accused No.1 has relied upon the following case authorities.
1. C. Kamalakkannan vs. State of Tamilnadu [2025 STPL 3075 SC]
2. A. Srinivasa Reddy Vs. Rakesh Sharma and Anr [(2023) 8 SSCC 711]
3. A. Srinivasalu Vs. State, Rep. By the Inspector of Police [(2023) STPL 7938 SC]
4. Dinesh Kumar Mathur vs. State of M.P. and Others [2025 STPL 1083 SC]
17. The learned counsel for accused No.3 has relied upon the following authorities;
1. Sunil Bharti Mittal V/s. Central Bureau of Investigation [(2015) 4 SCC
609.
2. Anil Khandelwal Vs. Phoenix India and another [(2025 SCC Online SC 1883)]
3. Aneeta Hada V/s. Godfather Travels and Tours Private Limited [(2012) 5 SCC 661) 14 Spl.CC.No.37/2015
4. Indian Oil Corporation Vs. NEPC India Ltd., and Anr [(2006) 6 SCC 736]
5. S.W.Palnitkar and Others Vs. State of Bihar and Another [(2002) 1 SCC 241]
6. Satishchandra Ratanlal Shah Vs. State of Gujarat and another [(2019) 9 SCC 148]
7. State of Karnataka Vs. Devendrappa [(2002) 3 SCC 89]
8. Inder Mohan Goswami and Another Vs. State of Uttaranchal and Ors.
[(2007) 12 SCC 1]
9. Binod Kumar and Another Vs. State of Bihar [(2014) 10 SCC 663]
10. Sarbajith Kaur Vs. State of Punjab and another [(2023) 3 SCC 423]
11. Deepak Gaba and Others Vs. State of U.P and another [(2023) 3 SCC 423]
12. Anukul Singh Vs. State of U.P. and another [2025 SCC Online SC 2060]
13. M/s.Alia infrastructure and Development Company Pvt. Ltd., Vs. State by CBI - WP No.12325/2020 in the High Court of Karnataka.
14. 2011 SCC online Kar 3899 - Ismail Khan Shah and Other Vs. State by CBI.
18. Heard both side. Perused all the records. 15 Spl.CC.No.37/2015
19. For disposal of this case, the points that would arise for my consideration are as under;
1. Whether the prosecution proves beyond all reasonable doubt that, Accused No.1-Pranab Kumar Roy, being the Deputy General Manager and Chief Regional Manager from 29.4.2008 to 26.6.2009 and as a General Manager from 27.6.2009 to 30.04.2010 in United Bank of India at Southern Regional Office, Chennai; entered into a criminal conspiracy with Accused No.3-D. Ravi Kumar and also with Accused No.2-M/s. Binary Spectrum Softech Pvt. Ltd., represented by its Director-D. Ravi Kumar; and in consequent upon the same, Accused No.1 sanctioned credit facility of Rs.14 lakhs as Term Loan and Rs.2 crores as Working Capital to Accused No.2-M/s.Binary Spectrum Softech Pvt., Ltd., by accepting inflated properties offered as a collateral security bearing Sy.No.110 of Doddathoguru village measuring 36 Guntas valued at Rs.9.80 Crores and village and property bearing No.95 of Anjanapura village measuring 1 acre valued at Rs.7.84 Crores and sanctioned above loan for the purpose of purchasing software package 'Medits' and accused No.2 and 3 mis-utilised said loan to the tune of Rs.16 crores in pursuance of illegal act or 16 Spl.CC.No.37/2015 agreement and thereby accused No.1 to 3 committed the offence of criminal conspiracy punishable under Section 120-B of IPC ?
2. Whether the prosecution further proves beyond all reasonable doubt that, Accused No.1- Pranab Kumar Roy, being a public servant and accused No.2 M/s. Binary Spectrum Softech Pvt. Ltd., represented by its Director D. Ravi Kumar and accused No.3-D. Ravi Kumar dishonestly induced United Bank of India to sanction loan of Rs.14 crores towards term loan and Rs.2 crores towards working capital for the purpose of procuring software package 'Medits', by submitting and accepting inflated properties offered as collateral security bearing Sy.No.110 of Doddathogur village and Sy.No.95 of Anjanapura village, Bangalore measuring 1 acre and diverted said loan amount for the purpose other than for which it was sanctioned, and caused wrongful loss to United Bank of India, Bangalore Branch to the tune of Rs.13,53,39,706/- and corresponding wrongful gain and cheated United Bank of India, Bangalore branch and thereby, Accused No.1 to 3 committed offence punishable under Section 420 r/w. 120-B of IPC ?
17 Spl.CC.No.37/2015
3. Whether the prosecution proves beyond all reasonable doubt that, Accused No.1, being the public servant as Deputy General Manager and Chief Regional Manager at Southern Regional Office, Chennai, United Bank of India, obtained bribe amount of Rs.7 lakhs i.e. Rs.2 lakhs on 10.7.2009 and Rs.5 lakhs on 9.10.2009 through account of M/s. Baba Sathyanarayana from accused No.2-Company, as a reward for sanctioning the loan and thereby, accused No.1 by corrupt or by illegal means obtained pecuniary advantage of Rs.7 lakhs by abusing his position as a public servant and caused wrongful loss to United Bank of India, Bangalore Branch and thereby committed criminal misconduct punishable under Section 13(2) r/w Sec.13(1)(d) of Prevention of Corruption Act, 1988 ?
4. What order ?
20. My findings to the above stated points are as as under;
Point No.1 : In the Negative Point No.2 : In the Negative Point No.3 : In the Negative Point No.4 : As per the final order for the following;
18 Spl.CC.No.37/2015REASONS Sanction in respect of Accused No.1:-
21. The accused No.1-Sri.Pranab Kumar Roy, the then Chief Regional Manager, Southern Regional office, United Bank of India, Chennai, who worked at relevant point of time in the United Bank of India, was retired from service on 31.10.2011; hence, no sanction for prosecution is required U/Sec.19 of PC Act, 1988, as per dictum laid down in the case of State of Kerala Vs. V.Padmanabham Nair (1999) 5 SCC 690, wherein it is held that, 'a person who ceased to be a public servant on the date when the court took cognizance, no sanction under section 19 of PC Act is required'.
22. Points No.1 to 3: As these points are interconnected and inter-related; hence, they are taken together for common discussion in order avoid repetition of facts.
23. It bears a heavy burden on the prosecution to prove beyond reasonable doubt that, the accused No.1- Pranab Kumar Roy, being a Public Servant worked as 19 Spl.CC.No.37/2015 Chief Regional Manager in the United Bank of India at Southern Regional office, Chennai, at relevant point of time, had criminally conspired with accused No.3- D.Ravikumar and accused No.2-M/s. Binary Spectrum Softech Pvt. Ltd, a Registered Company and in pursuance of said conspiracy, the accused No.2-Company duly represented by accused No.3-D.Ravi Kumar, had applied for a loan for the purpose of purchasing a software product called 'MEDITS' from an overseas vendor by name M/s.Optech Consulting Inc., Texas, USA, by inflating the value of properties offered as collateral security and as a result, accused No.1 has sanctioned credit facility of Rs.14 Crores as Term Loan and Rs.2 Crores as Working Capital to the Accused No.2-M/s.Binary Spectrum Softech Pvt. Ltd., by entering into illegal agreement with accused No.2 and 3; and thereby, accused No.2 and 3 have dishonestly induced the United Bank of India to sanction Rs.16 Crores as loan for the purpose of procuring software product 'MEDITS' from an overseas vendor, and after sanction, they diverted said loan amount for the purpose other 20 Spl.CC.No.37/2015 than for which it was sanctioned and as a result, the account of accused No.2-Company became NPA, thereby they caused wrongful loss to United Bank of India, Bengaluru Branch, Bengaluru to the tune of Rs.13,53,39,706/-, and thereby cheated the Bank; and accused No.1, who being a pubic servant as Chief Regional Manager working at Southern Regional Office, Chennai, had obtained a pecuniary advantage of Rs.7 Lakh through the account of M/s. Baba Sathyanarayana & Co. from the end of accused No.2 and 3 as a reward for the purpose of sanctioning the loan to accused No.2- Company by corrupt and illegal means and thereby accused No.1 has abused his position as public servant and thereby, he committed criminal misconduct as defined U/Sec.13(1)(d) of PC Act; and thereby the accused No.2 and 3 have committed the offences punishable U/Sec.120-B and 420 of IPC; and accused No.1 has committed the offences punishable U/Sec.120- B and 420 of IPC and U/Sec.13(2) read with Sec.13(1)(d) of Prevention of Corruption Act, 1988.
21 Spl.CC.No.37/2015
24. Accordingly, this court has framed charges against accused No.1 for the offences punishable U/Sec.120-B & 420 of Indian Penal Code and U/Sec.13(2) r/w. Sec.13(1)(d) of Prevention of Corruption Act-1988; and also framed charges against accused No.2 and 3 for the offences punishable U/Sec.120-B and 420 of Indian Penal Code.
25. Before proceeding to appreciate the evidence adduced by the prosecution to prove the charges levelled against accused No.1 to 3, let me take note of the arguments submitted by both side.
The Arguments of Prosecution:
26. It is vehemently argued by the learned Public Prosecutor for CBI that, the prosecution has proved the charges leveled against accused No.1 to 3, beyond reasonable doubt. It is argued that, based on the complaint lodged by PW.1, a FIR in RC.17(A)/2013 came to be registered against the accused by CBI/ACB, Bengaluru. The Investigating Officer has conducted a thorough investigation, collected several documents from the concerned authorities and finally, after having found 22 Spl.CC.No.37/2015 that there are sufficient materials to suggest that the accused No.1 to 3 have committed the alleged offences; hence, he submitted charge sheet against them for the offences punishable U/Sec.120-B and 420 of IPC and U/Sec.13(2) read with Sec.13(1)(d) of Prevention of Corruption Act, 1988.
27. It is further argued that, the Bank has conducted an internal investigation into the anomalies in the account of accused No.2-Company. After investigation/enquiry, the internal investigation team submitted detailed report as per Ex.P6; wherein, it found several irregularities in respect of credit facility sanctioned to accused No.2-Company. That the prosecution evidence, both oral as well as documentary, specifically shows that accused No.1, who being a responsible officer of the Bank, had not obtained Technical and Economic Viability Report at the time of sanction of loan to accused No.2-Company; not obtained due diligence report in respect of overseas vendor as required under the Circulars of Bank; overvaluation of properties offered as collateral security is accepted and 23 Spl.CC.No.37/2015 submitted; no independent assessment of value of properties was undertaken by the Regional office/Branch during the time of sanction; and thereby, in collusion with accused No.2 and 3, the accused No.1 has sanctioned the loan in gross violation of rules and regulations of the Bank and thereby facilitated the accused No.2 and 3 to divert the loan to other purpose; and for which, the accused No.1 has obtained Rs.7 Lakh as pecuniary advantage from accused No.2 and 3 as a reward. That accused No.2 and 3 have offered overvalued properties as collateral securities, thereby they dishonestly induced the Bank, in causing loss to the Bank to the tune of Rs.13.54 Crores and thereby, they cheated the United Bank of India.
28. It is further argued that, the accused No.1, as General Manager, Regional Office, Chennai has sanctioned the loan of Rs.16 Crores to accused No.2- Company, without carefully examining the materials and thereby he has committed misconduct within the meaning of Sec.13 of Prevention of Corruption Act. That there is sufficient material to show that accused No.1 has 24 Spl.CC.No.37/2015 obtained bribe from accused No.2 and 3. That PW.27, PW.28 and PW.29 have specifically stated in their respective statements recorded before the learned Magistrate U/Sec.164 of Cr.P.C., regarding payment of Rs.5 Lakhs and Rs.2 Lakhs to the account of M/s. Baba Sathynarayana & Co., on two occasions through RTGS; in turn, said amount of Rs.7 Lakhs was handed over to the wife of accused No.1. Though PW.27, PW.28 and PW.29 have been retracted from their respective statements recorded U/Sec.164 of Cr.P.C., but their statements have to be appreciated in view of Sec.157 of Indian Evidence Act. That Sec.157 of Indian Evidence Act makes it clear that, a statement U/Sec.164 Cr.P.C. could be used for both corroboration and contradiction and it could also be used to corroborate the testimonies of other witnesses. Thus, the circumstances which brought PW.27, PW.28 and PW.29 into the scene itself clearly goes to show that, the bribe amount was received by the accused No.1 as a reward for sanctioning the loan in favour of accused No.2-Company.
25 Spl.CC.No.37/2015
29. It is further argued by the learned Public Prosecutor that, much importance has to be given to the statements of PW.27 to PW.29 recorded U/Sec.164 of Cr.P.C., as said statements stand on different footage compared to statements recorded U/Sec.161 and 162 of Cr.P.C. That in terms of relevancy, admissibility and reliability are concerned, a due importance has to be given to a statements recorded U/Sec.164 of Cr.P.C., considering the facts and circumstances of each case. The learned Public Prosecutor further argued that, it is true that, in the case on hand, PW.27 to PW.29 have been retracted from their respective statements; however, the circumstances suggest that said witnesses have been won over by the accused No.1, therefore the Court has to examine the circumstances in which the statement was recorded and the reasons stated by the witnesses for retracting from the statement.
30. It is further argued that, the prosecution records suggest that, though the accused No.2 company has shown an address in the documents submitted to the Bank as its own; but in realty, said company was 26 Spl.CC.No.37/2015 purportedly functioning from the premises of another company by name M/s. Acropetal Technologies Pvt. Ltd. Further, the evidence of PW.7-K.S.Venkatakrishnan, a registered valuer of property indicates that the accused No.2 and 3 have overvalued the properties offered as collateral security and thereby, they have cheated the Bank.
31. Lastly, it is argued by the learned Public Prosecutor that, though there is no direct evidence to establish that accused No.1 has obtained the bribe of Rs.7 Lakhs as reward for sanctioning of loan to accused No.2-Company, but there is reliable circumstantial evidence adduced by the prosecution to connect the accused No.1 with acceptance of bribe. In support of his contention, the learned Public Prosecutor has relied upon a judgment of Hon'ble Apex Court passed in the case of Sharad Birdhichand Sarda Vs. State of Maharashtra, [AIR 1994 SC 1622]. With this line of argument, the learned Public Prosecutor prays this court to convict 27 Spl.CC.No.37/2015 the accused No.1 to 3 for the charge-sheeted offences.
The Arguments on behalf of Accused No.1:
32. The learned counsel for accused No.1 has vehemently argued that accused No.1 has only issued sanction order as per approval of Credit Committee and recommendation made by the Recommending Committee. That absolutely there is no evidence at all to connect the accused No.1 either with the offence punishable U/Sec.120-B of IPC or with offence punishable U/Sec.13 of Prevention of Corruption Act. That the Branch has forwarded the loan proposal, Credit committee gave approval and recommending committee has recommended the loan proposal of accused No.2- company; thus, only on the basis of recommendation of Credit Committee and Recommending Committee, the accused No.1 has sanctioned the loan. But without arraying the Manager of the Branch and Committee Members as accused, this accused No.1 alone has been 28 Spl.CC.No.37/2015 falsely implicated in the case by the Investigating Officer, which shows the bias attitude.
33. During the course of arguments, the learned counsel for the accused No.1 has highlighted the evidence of PW.1, PW.2, PW.3, PW.5, PW.30, PW.31, PW.32, PW.34, PW.35, PW.37 and PW.42 in order to show that accused No.1 has acted in good-faith while sanctioning the loan to accused No.2-Company and he has not committed any irregularities in sanctioning the loan. Further, the learned counsel has also highlighted the evidence of PW.27, PW.28, PW.29, PW.38, PW.41 and PW.42 in order to establish the innocence of accused No.1 with regard to the allegation of bribe of Rs.7 Lakhs made against him.
34. The learned counsel further argued that, as per the evidence of above said prosecution witnesses, except sanctioning the loan, the accused No.1 has not done anything which is illegal. Admittedly, the accused No.1 was not a member of Recommending Committee, which has examined all the loan papers forwarded by the Branch and upon finding them as proper and free from 29 Spl.CC.No.37/2015 any irregularity, then only the committee has recommended for the loan. Therefore, the prosecution has failed to prove that the accused No.1 has conspired with accused No.2 and 3 and thereby committed cheating and fraud against the United Bank of India.
35. With regard to allegation of acceptance of Rs.7 Lakhs as pecuniary advantage from accused No.2 and 3 by the accused No.1, it is argued that, there is no iota of evidence to show demand and acceptance of bribe by the accused No.1 as alleged by the prosecution. He argued that, PW.27, PW.28 and PW.29 who said to be given their statements before Magistrate U/Sec.164 of Cr.P.C., have all turned hostile and not deposed positively in respect of payment of Rs.5 Lakh and Rs.2 Lakh to accused No.1 on two occasions through the account of M/s.Baba Sathyanarayana & Co., which is belonging to PW.29. Even in their respective cross examinations done by the prosecution also, nothing was elicited to establish the allegation of bribe. Thus, the learned counsel contended that, there is no evidentiary value attached to the Sec.164 Statements of PW.27, PW.28 and PW.29 in the 30 Spl.CC.No.37/2015 absence of positive oral evidence to prove the contents of said statements.
36. Thus, lastly, it is argued that, as the prosecution has miserably failed to prove the charges of Criminal Conspiracy, Cheating & Fraud and Criminal Misconduct punishable U/Secs.120-B and 420 of IPC and U/Sec.13(2) of PC Act, against accused No.1. Accordingly, it is prayed to acquit the accused No.1.
The Argument on behalf of Accused No.3:
37. The learned counsel for accused No.3 has argued that, from the evidence recorded and documents marked on behalf of prosecution in the case on hand, it is seen that, there is no cogent material brought out by the prosecution to prove the charge of criminal conspiracy in availing the credit facility for accused No.2-Company; and accused No.3 was not a Managing Director of said company, and was not involved in the day-today affairs of accused No.2-Company. That admittedly, the loan has been sanctioned in the name of M/s.Binary Spectrum Softech Pvt. Ltd. i.e. accused No.2; therefore, accused 31 Spl.CC.No.37/2015 No.3 cannot be prosecuted vicariously for the alleged offences.
38. It is further argued that, the evidence of prosecution witnesses, more particularly Bank Officers and Bank Panel Advocates and Valuers, reveals that the Bank has followed all due process and due diligence and thereafter, the Bank has accorded a loan to accused No.2-Company. That collateral security offered by accused No.3 as Guarantor has also been examined in all aspect and property was also inspected by the empaneled valuer and accordingly, gave valuation reports as per Ex.P45 and P48 and said properties have been accepted by the Bank for the purpose of collateral security.
39. It is further argued that, the loan was sanctioned only after following due procedure and thereafter, the loan amount was disbursed by the Branch only after compliance of terms and conditions of sanction. Such being the case, the allegation that accused No.2 and 3 have conspired with accused No.1 in obtaining loan illegally is not established by the prosecution. Thus, there is no any iota of evidence to 32 Spl.CC.No.37/2015 show any alleged conspiracy by accused No.3 with accused No.1 in any manner in availing the credit facility for accused No.2-Company.
40. It is further argued that, after disbursement of loan, the loan so granted for accused No.2-Company, has been utilized for the purpose for which it was granted and no incriminating evidence is produced either direct or circumstantial to show any diversion of funds of loan by the accused No.2 or accused No.3. That CBI has unnecessarily roped the accused No.3 in the case on hand merely because he was one of the Directors of accused No.2-Company. That due to some unavoidable reasons, accused No.2-Company has sustained loss; therefore, the account of company became NPA due to non-payment of loan. That the Bank initiated recovery proceedings and also filed complaint before CBI with intention to put pressure on the accused No.2-Company for settlement. Thus, the Bank has converted a pure civil liability into a criminal case as a tool or instrument for unlawful purpose.
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41. It is further argued that, the evidence of PW.42-Investigating Officer discloses that the loan documents were duly scrutinized by concurrent officer, legal officer, panel valuer and similarly by monitoring officer. Further, his evidence goes to show that, the loan amount sanctioned was credited to the account of overseas vendor. Further, the evidence of I.O. also shows that concerned Bank Officer has conducted a pre- inspection of property in Sy.No.110 of Doddathogur village and has submitted his report in recommending the grant of loan. Therefore, in view of evidence of prosecution witnesses including I.O., it clearly indicates that, the prosecution has utterly failed in demonstrating that there is a fraud committed in availing the loan and thereby the accused have cheated the Bank, in pursuance of their criminal conspiracy. With this line of argument, the learned counsel for the accused No.3 has prayed this court to acquit the accused No.3. The Prosecution Evidence in respect of Accused No.1:
42. In the background of arguments advanced by both Prosecution as well as Defense side, when we 34 Spl.CC.No.37/2015 appreciate the evidence on record, both oral as well as documentary, it would go to show that, there is no any dispute with regard to sanction of loan in favour of accused No.2-M/s. Binary Spectrum Softech Pvt Ltd, to the tune of Rs.16 Crores for the purpose of procuring a software product called 'MEDITS' from an Overseas Vendor namely M/s.Optech Consultancy Inc., Texas, USA. It is also an undisputed fact that accused No.3- D.Ravikumar was authorized by the accused No.2- Company through a resolution dated:05.11.2009 to open an account in the name of accused No.2 with the United Bank of India and to operate all the transactions relating to the account of accused No.2-company. It is also on record that, all the correspondences were done by the accused No.3 in the capacity as 'Director' on behalf of accused No.2-company with United Bank of India in respect of loan proposal of accused No.2-Company. Thus, it is very clear that, accused No.3, who is Director of accused No.2-Company, has actively participated in the loan transactions of accused No.2-Company. Therefore, the contention of counsel for the accused No.3 that, the 35 Spl.CC.No.37/2015 accused No.3 cannot be held responsible vicariously, is not acceptable.
43. That PW.1-Sri.D.Sinha, then Deputy General Manager and Regional Manager of United Bank of India, Bengaluru, is the person who has set the criminal law into motion by lodging complaint against M/s. Binary Spectrum Softech Pvt. Ltd., Bengaluru (i.e., accused No.2) in respect of some anomalies in advances to the tune of Rs.16 crores pertaining to account of accused No.2-Company maintained at United Bank of India, Bengaluru Branch, Bengaluru. His complaint filed before the CBI is marked as Ex.P1, in the case on hand. His evidence, in his examination-in-chief, would go to show that, the accused No.2-Company submitted a credit proposal for Rs.16 crores with Bengaluru Branch of United Bank of India, said proposal was recommended by then Branch Manager and Assistant General Manager Sri.A.Banerjee for sanction to the Southern Regional office, Chennai and it was approved/sanctioned by Sri.Pranab Kumar Roy [i.e., accused No.1], the then General Manager and Chief Regional Manager, Southern 36 Spl.CC.No.37/2015 Region, Chennai, which includes Rs.14 Crore as term loan and Rs.2 Crore as working capital. According to this witness, the borrower [i.e. accused No.2-Company] did not repay the loan amount as per original terms and conditions stipulated in the agreement, and when the borrower did not repay the amount, the account became NPA as on 30.09.2012 and as on that date, the amount due was Rs.13.53 crores which includes outstanding and unapplied interest. Further, as per evidence of this witness, the Internal Vigilance Department of United Bank of India has investigated the matter and found that at the time of sanctioning loan, Branch did not obtain Techno-Economic Viability Report and also due diligence report from Dun and Bradstreet, to know the credibility of the overseas vendors.
44. Further, PW.2-Sri.Dibakar Bhattacharjee, then Chief Manager, Vigilance Department, United Bank of India, Kolkata, is the person who has conducted the internal investigation into the irregularities found in the account of M/s. Binary Spectrum Softech Pvt. Ltd. He conducted the investigation along with one 37 Spl.CC.No.37/2015 Sri.D.Krishnamurthy, Chief Manager, on the instruction of Chief Vigilance Officer. His evidence discloses that, from their investigation, they found that the loan of Rs.16 crores was sanctioned to accused No.2-Company for procuring software package named 'MEDITS' from a overseas vendor M/s. Optech Consulting Inc. Texas, USA, without undertaking Techno-Economic Viability Study Report through an attested agency to assess the Techno Economic Viability of the project and no due diligence was conducted in respect of overseas vendor. Further, the internal investigation team consists of this witness and another, also found that the foreign remittance was made without due approval from the Regional Office.
45. PW.3-Sri.C.Balachandran, the then Deputy General Manager (Finance) in United Bank of India, Head Office, Kolkata and also worked as Assistant General Manager, at Southern Regional Office, United Bank of India, Chennai, at relevant point of time; whose evidence goes to show that, the loan proposal of accused No.2 was submitted by Branch Office along with its 38 Spl.CC.No.37/2015 recommendation for sanction of credit facility to the Regional Office and it was processed in the Regional Office by Sri.K.R.Tamil Selvam and Sri.T.S.Sudarshan, who are the initiating officers. After initiating the proposal, said proposal was placed before him and he, after going through the proposal, recommended the proposal as recommending authority and placed before the Credit Committee consisting of Sri.Annachamy and Sri.N.Seetaramaiah for approval. Said committee approved the sanction of credit facility and finally, the loan proposal was placed before accused No.1-Pranab Kumar Roy, the General Manager for his sanction, who was the sanctioning authority to sanction the credit facility and finally the loan was sanctioned on 23.10.2009 as per Ex.P4(g) and after the sanction, the loan was disbursed by the concerned Branch to the Borrower/concerned. This witness has specifically deposed that they have not taken TEV study report because at that time, the lending policy did not prescribe for such report.
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46. PW.5-Sri.Arupendu Banerjee, the then Branch Manager of Bengaluru Branch, is the officer who has forwarded the loan proposal of accused No.2-company with recommendation to the Regional Office, Chennai; and whose evidence in his examination-in-chief goes to show that, the accused No.3 has submitted a request for loan as per Ex.P5(c) in the capacity as Director of accused No.2-Company. After receiving loan application, he advised then Chief Manager-Sri.K.V.Murali to undertake pre-sanction inspection and said Sri.K.V.Murali submitted his report as per Ex.P5(d). Thereafter, he forwarded loan proposal along with pre- inspection report to the Regional Office, Chennai. Further, an officer from Regional Office and himself, have jointly inspected the Unit and the property offered for mortgage and both submitted joint report as per Ex.P5(e). Thereafter, Regional Office has sanctioned the credit facility to accused No.2-Company as per Ex.P5(f). Thereafter, the Branch has requested one Sri.K.Prasanna Kumar to conduct verification of company, he conducted verification and submitted his report as per Ex.P5(o). 40 Spl.CC.No.37/2015
47. PW.30-Sri.K.R.Baskaran, who worked as Chief Manager during 2009 in United Bank of India at Bengaluru Branch, Bengaluru, has deposed that, he has dealt with the credit account of M/s.Binary Spectrum Softech Pvt. Ltd., Bengaluru after he assumed charge as Chief Manager at Bengaluru Branch. As per his evidence, he has complied with terms and conditions of sanction and disbursed the loan amount after getting approval from Southern Regional Office. This witness has identified Ex.P4(e), the terms and conditions of said loan and Ex.P4(f) is the covering letter for sanction of the loan and two valuation reports submitted by accused No.3 are identified by this witness as per Ex.P4(y) and Ex.P4(z). According to this witness, it is necessary to obtain Techno-Economic Viability Report of the project and due diligence report in respect of overseas vendor, but that was not done in the present case.
48. PW.31-Sri.K.R.Tamil Selvan, who joined as Chief Manager (Advances) at Southern Regional Office, Chennai during the year 2009 has deposed that, he has processed the loan application of M/s.Binary Spectrum 41 Spl.CC.No.37/2015 Softech Pvt. Ltd. After processing the said application, it was submitted to the recommending authority and recommending authority has recommended for sanctioning the loan and finally, the Chief Manager of Southern Regional Office i.e. accused No.1-Sri.Pranab Kumar Roy had sanctioned the loan of Rs.16 Crores to accused No.2-Company. This witness has identified Ex.P4(e), which is a process note prepared by him while processing the loan application of accused No.2- Company.
49. PW.32-Sri.T.S.Sudarsan, who worked as a Senior Manager (Credit Department) at Southern Regional Office, Chennai, during the period from May- 2009 to May 2010, has deposed that as a Senior Manager (Credit Department), he used to receive the proposals from different branches. After verifying the proposals and on advise of seniors, he used to allot the said proposals to different officers in the department for processing and to put up the proposal before the Credit Committee and further for sanction before the competent authority. That, loan application of accused No.2-company was processed 42 Spl.CC.No.37/2015 by him and PW.31-Sri.K.R.Tamil Selvan. His evidence further discloses that, while processing the loan application, he has verified the documents enclosed with the loan application such as balance-sheet, income-tax returns of the individuals and companies, KYC documents of the companies and the project report.
50. PW.34-Sri. N.Seetharaman, who served as Senior Manager (Administration) in the United Bank of India at Southern Regional Office, Chennai during the year 2008-09, has deposed that, he was a member of Regional Credit Committee during the year 2008-09. The loan proposal of accused No.2-Company was initiated by then Chief Manager-Sri.K.R.Tamil Selvan and recommended by Assistant General Manager Sri.C.Balachandran. That said proposal was placed before the Credit Committee for recommendation for approval; and himself, Sri.Annachamy and Sri.M.K.Raman were the members of the said credit committee. That himself and another member of Committee have gone through the process note and considered the parameters of proposal and security and 43 Spl.CC.No.37/2015 thereafter, recommended for sanction by the General Manager.
51. PW.35-Sri.R.Annachamy, who worked as Senior Manager in the United Bank of India at Southern Regional Office, Southern Division, during the year 2008- 09, has deposed that, he was one of the Regional Credit Committee members during that period and himself and Sri.Seetharaman have verified the process note and approved the proposal for final sanction. According to this witness, since the loan proposal was in respect of software which is intangible in nature, their lending policy says that, in such credit exposure, it should cover 100% collateral security of tangible nature. He further deposed that, the Branch has submitted modified proposal for substitution of security since there was some difficulty for execution of fire security submitted along with the original proposal. The modified proposal for substitution of security was also approved by the Regional Committee as per Ex.P4(n).
52. Thus, the plain reading of testimony of PW.1, PW.2, PW.3, PW.5, PW.30, PW.31, PW.32, PW.34 and 44 Spl.CC.No.37/2015 PW.35 in their respective examinations-in-chief, would go to suggest that, except sanctioning the loan of Rs.16 Crores to accused No.2-M/s.Binary Spectrum Softech Pvt. Ltd., the accused No.1 did not play any vital role in sanctioning the loan to accused No.2-company illegally in order to cheat United Bank of India in conspiracy with accused No.2 and 3. The very own evidence of officers of United Bank of India, goes to show that, the Branch has forwarded the loan proposal, Credit committee gave approval and recommending committee has recommended the loan proposal of accused No.2- company; thus, only on the basis of recommendation of Credit Committee and Recommending Committee, the accused No.1 has sanctioned the loan. None of the prosecution witnesses above named, have deposed that while forwarding the loan proposal of accused No.2- Company or approving it or recommending it to the Regional office for sanction, the accused No.1 has not swayed them away.
53. Further, when we peruse the evidence of aforesaid witnesses in their respective cross 45 Spl.CC.No.37/2015 examinations, it is seen that, PW.2-Sri.Dibakar Bhattacharjee has admitted that, the loan proposal sent in this case was as per lending policy prevailing as on that day and accused No.1, then Chief Manager of Southern Regional Office, Chennai, was having discretion to sanction the loan and before sanction of loan by the chief Manager, the matter would go before the committees which are the initiating authority, processing authority and recommending authority and then, the file would be placed before the chief Manager for sanction. It is also admitted by PW.2 that, in the present case, the loan file was processed before the committees and recommended the loan proposal to sanctioning authority and the discretion was exercised by accused No.1-chief Manager for sanction of loan and thereafter, it was approved by the Executive Director in the Head Office. Kolkata. Further, this witness stated that he does not know exactly whether in respect of importing software, TEV report is not essential or mandatory; however, this witness further admitted that subsequently, at the time of restructuring of loan, TEV report was obtained. 46 Spl.CC.No.37/2015 Further, during his cross-examination, PW.2 admitted that, subsequently, during CBI investigation, he came to know that, the end use certificate had been obtained by accused No.2 and made available to the Bank. This witness also admitted that in the report Ex.P6 and P7, they mentioned loan was disbursed to various vendors without the approval of Regional Office and Head Office, but subsequently they noticed that during the investigation of CBI, such approval was obtained.
54. Further, during his cross-examination done by the accused No.1, PW.3-Sri.C.Balachandran has stated that he was involved in loan sanction process and he did not see any lacunae or irregularity in the loan proposal. Further, this witness has stated that, accused No.1 has accorded the sanction as per Ex.P4(f) on the recommendation of recommending committee and the sanction made by the accused No.1 was in accordance with the lending policy prevailing as on that date. He also admitted that, finally the sanction of credit facility has to be approved by the Executive Director of the Bank in Head Office, at Kolkata. He further admitted that as per 47 Spl.CC.No.37/2015 Ex.D1 dated:05.02.2010, a noting of credit proposal by 3 members was sent to Executive Director which contained the loan proposal of accused No.2 and along with other two proposals. He also admitted that as per Ex.D1(a), the Executive Director has made his endorsement as 'examine and put up' after proposal was approved by him. According to this witness, accused No.2-Company neither comes under Infrastructural Industry nor under Industrial projects nor under public services. The end use certificate in respect of this type of credit facility has to be issued by Chartered Accountant. This witness also admitted that he has not noticed in Ex.P4 [i.e. loan file of accused No.2-Company] any irregularity done by the accused No.1 with regard to his power.
55. Further, during his cross-examination done by the accused No.1, PW.5-Sri.Arupendu Banerjee has stated that there was no influence from Regional Office for sending any proposal of accused No.2 or for showing any favour. The proposal has been sent in the normal banking procedure.
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56. Further, during his cross-examination done by the accused No.1, PW.30-K.R.Baskaran has stated that, Initiating Authority is consisting of Senior Manager and Chief Manager; Recommending Authority is Assistant General Manager and Credit Committee was consisting of 3 Senior Managers. This witness further admitted that, PW.3-Sri.C.Balachandran was Assistant General Manager and he was the recommending authority for the loan proposal of accused No.2-Company; that said Sri.C.Balachandran has signed as a recommending authority on Ex.P4(e); initiating authorities consisting of Senior Manager-Sri.T.S.Sudarshan and Chief Manager- Sri.Tamil Selvan have initiated this loan transaction and credit committee consists of 3 Senior Managers viz., Sri.R.Annachamy, Sri.M.K.Raman and Sri.N.Seetharaman, have put their signatures by recommending the loan proposal. Further, this witness has admitted that, Branch office disbursing a loan has to send a credit disbursement monitoring sheet to the controlling office and Branch Manager authorizes the disbursal and he was the Branch Manager at that time. 49 Spl.CC.No.37/2015 He admitted that Ex.P4(e) was sent to the Branch office from Regional Office before disbursement.
57. Further, during his cross examination done by the accused Nos.2 and 3, PW.30 has stated that the concurrent auditor was posted in the United Bank of India Bengaluru since it is a very large Branch. The concurrent auditor will check the transactions on the following in respect of transactions of the previous day and this witness has admitted that, if concurrent auditor brings to the notice of the Manager any mistakes in the transactions, it will be rectified immediately. He further admitted that the Branch has to submit a periodical monthly control report every month to the controlling officer informing him the status of all the accounts beyond threshold limits. Further, he admitted that, whenever a request is received from a person for sanction of loan, the concerned Branch Manager will mark it to the officer dealing with credit, the said officer after verifying the documents and also visiting the office if necessary and also verify the antecedents of the project/ proposal and also after verifying the securities, if satisfied 50 Spl.CC.No.37/2015 will be recommended under the signature of Manager and thereafter, proposal will be sent to the Regional Office, Chennai. Further, he also admitted that, if the Manager of the Branch is not satisfied regarding the title of the property and the value of the property offered as a security, the sanctioned loan will not be disbursed. Further, this witness has admitted that when he took charge of the bank, all the procedural aspects in respect of present loan transactions were completed and loan had been sanctioned by the controlling office and it was at the stage of disbursement of loan amount.
58. Further, during his cross-examination done by the accused No.1, PW.31-Sri.K.R.Tamil Selvan has admitted that, he was one of the initiating authorities along with PW.32-T.S.Sudarshan and initiating authority generally verify whether proposal submitted by the Branch office is in confirmation with lending policy of that period; in case, if there are any dilution from lending policy in the proposal submitted by the Branch office, then, they will refer the file to Head Office instead of referring to the recommending authority. He admitted 51 Spl.CC.No.37/2015 that, himself and another initiating authority Sri.T.S.Sudarshan, have recommended the loan proposal of accused No.2-Company to the recommending authority. He also admitted that before recommending to the recommending authority, they have scrutinized the loan proposal. He further admitted that, there was no any irregularity in the proposal; therefore, they have recommended to the recommending authority and then only, the recommending authority has recommended said loan; and thereafter, the file comes to Regional Credit Committee or recommending authority, and in this case, the loan proposal of accused No.2-Company has been approved by the Regional Credit Committee.
59. That PW.31-Sri.K.R.Tamil Selvan, has further admitted that once the loan proposal is scrutinized by the initiating authority, recommended by the recommending authority and approved by the Regional Credit Committee, then there cannot be any bar for the General Manager to sanction the loan. According to this witness, there was no irregularity or infirmity in the approval by the Regional Committee for sanction of loan by the 52 Spl.CC.No.37/2015 sanctioning authority, except three conditions mentioned in the terms and conditions of sanction for pre- disbursement and Pre-disbursement conditions are to be complied before disbursement of the amount. This witness has further admitted that there is no deviation from lending policy by accused No.1 in sanctioning the loan to accused No.2-Company.
60. Further, during his cross-examination, PW.32- T.S.Sudarshan has admitted that, the loan proposal [of accused No.2-Company] was in conformity with the lending policy for that period. Regrading procedure as to initiating, scrutinizing of loan documents, recommending and approval by the Credit committee, this witness has admitted the suggestions of defense side, on the similar lines of PW.31-K.R.Tamil Selvan. This witness has also admitted that without recommendation of the recommending authority and the approval by the Regional Credit Committee, sanctioning authority cannot sanction the loan. This witness has further admitted that in the case of sanction of loan to accused No.2-Company, there is a proper initiation, proper recommendation and 53 Spl.CC.No.37/2015 proper approval by the Regional Credit Committee. This witness has also admitted that Techno-Economic Viability Report was not compulsory for software projects during that period.
61. Further, during his cross examination done by the accused Nos.2 and 3, PW.34-N.Seetharaman has admitted that, after receiving loan application, the Branch sends application, process note and recommendation to the Regional Office and in the Regional Office, the Initiating Officer goes through the application, process note and the recommendation and he prepares a separate process note which will be placed before recommending authority; thereafter, recommending authority recommends the proposal, if he is satisfied with the credibility of the proposal. After the recommending authority recommends the proposal, it comes to the Regional Credit Committee for scrutiny. Thereafter, the Credit Committee will approve the proposal for sanction. He identified Ex.P4(e) which is the endorsement made by the Regional Credit Committee which was approved for sanction. After the Regional 54 Spl.CC.No.37/2015 Committee approves the proposal for sanction, the proposal goes to the sanctioning authority for sanction; thereafter, sanctioning authority will go through the proposal and finally accords the Sanction.
62. Further, during his cross examination done by the accused No.2 and 3, PW.35-R.Annachamy has admitted that the proposal for advancement has to be made in the Branch where the customer is having account. In some cases, in case of a big proposal, the customer can directly submit the loan application to the Regional Office which will be forwarded to the Branch for processing. He further stated that he does not know whether loan application in the present case was submitted directly to the Regional Office or through the Branch. He also admitted that the sanction accorded by the sanctioning authority is to be forwarded to the Executive Director at Kolkata and the Executive Director has authority to direct to re-examine the noting sent for approval; in case, the Executive Director does not approve the noting, then, the sanction accorded by the sanctioning authority will be withheld. This witness has 55 Spl.CC.No.37/2015 identified Ex.D1 which is noting of Executive Director approving the sanction of proposal in respect of accused No.2-Company. By seeing Ex.D3, this witness also stated that, the Executive Director has approved the substitution of security which was recommended by the Regional Credit Committee and also approved by the sanctioning authority.
63. Further, in his cross examination done by the accused No.1, PW.37-Sri.L.Anbalagan has stated that as a member of Regional Credit Committee, he did not find any lapses in the proposal sent by the Branch Manager and the matter did not come before Regional Credit Committee for re-appraisal.
64. Thus, cumulative reading of entire evidence of PW.1, PW.2, PW.3, PW.5, PW.30, PW.31, PW.32, PW.34, PW.35 and PW.37, who are the main material witnesses for the prosecution case, goes to show that, the accused No.1 has not involved in conspiracy with accused No.2 and 3, at any point of time, in sanctioning loan to accused No.2-Company and according to the evidence of above said material witnesses of prosecution, the loan 56 Spl.CC.No.37/2015 has been properly processed, recommended, approved and thereafter, finally sanctioned by the accused No.1- Sri.Pranab Kumar Roy. Moreover, as per Ex.D1 to D3, accused No.1 has exercised his discretionary power in sanctioning the loan and its modification. Therefore, there is nothing which suggests accused No.1 has sanctioned the loan to accused No.2-Company by violating due procedure of the Bank and against lending policy of the Bank.
65. It is important to note here that, in the complaint-Ex.P1 itself, at the last Paragraph of Main Paragraph No.4, it is specifically mentioned that, 'the proposal [i.e. loan proposal of accused No.2-Company] was forwarded by Bangalore Branch to Southern Regional Office, Chennai on 05.09.2009 under the signature of Shri. A. Banerjee [i.e. PW.5] Assistant General Manager, recommending for sanction of Term Loan of Rs.14 Crores and Cash Credit of 2 Crores by violating the bank norms, without verifying the marketability of the guaranteed properties and creditworthiness of borrowers'. Thus, from the very averment of complaint, it is clear that, PW.5- 57 Spl.CC.No.37/2015 Sri.Arupendu Banerjee being then Branch Manager, United Bank of India, Bengaluru Branch, has recommended the proposal of accused No.2-Company by violating the Bank norms, without verifying the marketability of guaranteed properties and creditworthiness of borrowers. Thus, it was a primary responsibility of PW.5 to obtain due diligence report before forwarding the loan proposal to Regional office, but that was done by him. Further, at Paragraph No.16 of complaint-Ex.P1, it has been stated that, 'in view of above facts and circumstances, it is apparent that Shri.D.Ravi Kumar of company availed term loan limit from the Bank by furnishing incorrect information/concealment of facts and with suspected involvement of recommending and sanctioning authorities i.e. Sri. A. Banerjee, then Assistant General Manager and Sri. Pranab Roy, then General Manager, Southern Region, Chennai, respectively; and they have also submitted/accepted highly inflated valuation report, defrauded and cheated the Bank to the tune of Rs.13.54 Crores'. Thus, PW.1, in his complaint, has specifically taken the name of PW.5-Arupendu 58 Spl.CC.No.37/2015 Banerjee along with the name of accused No.1-Pranab Kumar Roy, suspecting his involvement in recommending the loan proposal of accused No.2-Company. Furthermore, during his cross examination, PW.30- Sri.K.R.Baskaran has specifically admitted that, when Arupendu Banerjee-PW.5 was head of the Branch, all the procedural aspects in respect of alleged loan transaction was done. However, the Investigating officer has implicated only the accused No.1 in the case and said Arupendu Banerjee-PW.5, then Branch Manager of Bengaluru Branch, has been cited as prosecution witness, for the best reasons known to him.
66. Further, as per another Internal Investigation Report marked at Ex.P7 [Page No.3], the connecting officials of the Bank in respect of irregularities committed in the credit facility of accused No.2-Company are, 1) Sri.Arupendu Banarjee-PW.5, according to Ex.P7-report, loan proposal of accused No.2-company was forwarded by him without processing at his end; 2) Sri.T.S.Sudarshan-Senior Manager & Sri.K.R.Tamil Selvan-Chief Manager, both as Initiating officers; 3) 59 Spl.CC.No.37/2015 Sri.C.Balachandran, then AGM as recommending officer;
4) Sri.R.Annachamy & Sri.Seetharam, both Senior Managers as members of Credit Committee; and 5) Sri.Pranab Kumar Roy, then General Manager as sanctioning authority. Thus, as per Ex.P7 report, above mentioned officers are all have played active role in respect of loan of accused No.2-Company; however, except accused No.1-Sri.Pranab Kumar Roy, all the above mentioned officers are cited as prosecution witnesses, though they are directly responsible for the irregularities as alleged in the Internal Investigation Reports marked at Ex.P6 and Ex.P7.
67. So far as obtaining of Techno-Economic Viability Report at the time of sanction is concerned, it is the finding of Ex.P6-report that, TEV Report on the project of accused No.2-Company was not undertaken by the Appraisal Officials. However, it is not specifically stated in the report that who are all said appraisal officials who have not carried out the exercise of obtaining TEV Report. Usually the Appraisal officers in the Banks are the responsible officers who evaluate loan 60 Spl.CC.No.37/2015 proposals/applications to ensure the Bank's interest and also evaluate borrower's creditworthiness and ability to repay the loan. Obviously, in the case on hand, PW.3, PW.5, PW.31, PW.32, PW.34 and PW.35 can be considered as Appraisal Officers in respect of loan proposal of accused No.2-Company; it is because as PW.5-Sri.A.Banarjee, Branch Manager has forwarded the loan proposal to Regional office; PW.31-Sri. K. R. Tamil Selvan and PW.32-Sri. T. S. Sudarshan attached to Regional Office, have initiated the proposal; PW.3- Sri.C.Balachandran, then AGM has recommended the loan proposal; and PW.34-Sri.Seetharaman and PW.35- Sri.R.Annachamy both Senior Managers, are the members of Credit Committee, have approved the proposal; and thereafter, accused No.1 being the sanctioning authority, has accorded his sanction for the loan proposal of accused No.2-Company. Therefore, it is a failure on the part of above said officers, if there are any irregularities occurred in the credit facility of accused No.2, as per Ex.P6 and P7. But fixing the 61 Spl.CC.No.37/2015 responsibility solely on the shoulder of accused No.1 for all the alleged irregularities, is not proper and acceptable.
68. It is another important aspect which needs to be considered is that, whether TEV report is necessary or not, in respect of nature of loan sought by accused No.2- Company. Admittedly, nature of loan sought by the accused No.2-Company is not either for Industrial Projects or for any infrastructural industry; but it is for purchase of IT Software product from an overseas vendor. As per admissions of PW.2 and PW.3, the credit facility granted to accused No.2-Company is under Small and Medium Enterprises Scheme. In his cross, PW.2 pleaded his ignorance by stating that he is not fully aware whether in SME loan, the Techno-Economic Viability Report is required or not. It is significant to note here that, PW.2, along with another officer, has investigated the irregularities in respect of credit facility of accused No.2-Company and submitted reports as per Ex.P6 and P7. But without having the knowledge as to Techno- Economic Viability Report is required or not in the nature of loan granted to accused No.2-Company, PW.2 has 62 Spl.CC.No.37/2015 stated in his reports as per Ex.P6 and P7 that, 'the Techno-Economic Viability Report has not been obtained at the time of sanction'. Further, PW.3 in his chief examination has specifically deposed that they have not taken TEV Study Report because at that time, the lending policy did not prescribe for such report. From this piece of evidence of PW.3, it is very clear that, the lending policy of the Bank, at that period of time, did not prescribe for obtaining of TEV report and it is also clear that, it is not the duty of accused No.1 to obtain the TEV Report; rather, it is the duty of Initiating officers, recommending officers and members of Credit committee. Be that as it may, PW.32 has further admitted in his cross examination that, TEV report was not compulsory for software projects during that period [i.e. at the time of sanction of loan to accused No.2-company].
69. It is true that PW.30-Sri.K.R.Baskaran has deposed in his examination-in-chief that, TEV Report is necessary before sanctioning loan of more than Rs.10 Crores. But in his cross examination, he stated that, the condition of obtaining a TEV report is in lending policy 63 Spl.CC.No.37/2015 but there is no specific document to show that TEV report is required for software projects. However, none of the prosecution witnesses including PW.30- K.R.Baskaran, have deposed that it is the duty of accused No.1 to obtain TEV Report.
70. It is important to note here that, though in Ex.P3-Lending Policy of United Bank of India, a reference can be found as to Techno-Economic Viability Report, but it is with respect to 'Project Financing' and said 'Project Financing' includes Long Term Infrastructure, Industrial Projects and Public Services; but not necessarily for finance to Information Technology and Software industry. Further, as per Ex.P2 which is attested true copy of Manual of Instructions Part 4 Volume-I; wherein Sub- Paragraph No.7 of Paragraph No.4.11 speaks about want of Technical feasibility, Economic Viability Report. But this pertains to New Proposal; however, in the case on hand, it is not shown that loan proposal of accused No.2 is a new proposal or not. Therefore, there is no specific and cogent evidence adduced by the prosecution to show that the Techno-Economic Viability Report is must for 64 Spl.CC.No.37/2015 even loan to Software Industries. Accordingly, the allegation that accused No.1 has cheated the United Bank of India and thereby committed misconduct by conspiring and colluding with accused No.2 and 3 by not obtaining the Techno-Economic Viability Report, is not established.
71. So far as allegation as to Due diligence report on the overseas vendor and his credibility was not obtained from Dun & Bradstreet as required under Bank's circular, is concerned; again it is not clearly demonstrated by the prosecution that who had to obtain due diligence report on overseas vendor. It is because, as per complaint of PW.1 marked at Ex.P1, PW.5-Arupendu Banerjee, then Assistant General Manager and Head of Bengaluru Branch, has forwarded the loan proposal of accused No.2-company recommending for sanction of Term Loan of Rs.14 Crores and Cash Credit of 2 Crores by violating the Bank Norms and without verifying the marketability of the guaranteed properties and creditworthiness of Borrower. Thus, from this averment of Ex.P1, it is very clear that, PW.5 as a Branch Head had 65 Spl.CC.No.37/2015 to obtain due diligence report on overseas vendor and its credibility and also regarding creditworthiness of Borrower. As already stated above, PW.5 has not been made as accused but he is shown as prosecution witness. It is true that, PW.2 in his report marked at Ex.P6 as well as in his oral testimony, has stated that no due diligence report of overseas vendor is obtained from Dun & Bradstreet and Export Credit Guarantee Corporation by the Sanctioning Authority; however, the prosecution has failed to substantiate his said piece of evidence by producing cogent documentary evidence suggesting that it is only the accused No.1 who had to obtain said Due Diligence Report of overseas vendor, before sanctioning the loan for accused No.2-Company. It is because, the loan proposal of accused No.1 had been forwarded by the Branch to the Regional Office and thereafter, it went through the hands of Initiating (process officers) officers, member/s of recommending committee and members of Credit committee and finally, it was placed before accused No.1, the Sanctioning Authority. 66 Spl.CC.No.37/2015
72. Moreover, during his cross examination done by accused No.1, PW.2 has admitted that the proposal [i.e. loan proposal of accused No.2-company] was as per the lending policy prevailing as on that day. Further, he admitted that, in Ex.P6 and P7, he has not mentioned that subsequently TEV report has been obtained because he was not having information about said fact. He also admitted that while he was submitting the report, he was not given copy of TEV report. This witness also stated that, subsequently, he came to know that the information as to new premises of accused No.2 company had come to the knowledge of concerned Branch by the accused No.2. Further, during his cross-examination, PW.2 admitted that, subsequently, during CBI investigation, he came to know that, end use certificate had been obtained by accused No.2 and the same was made available to the Bank. This witness also admitted that in the report Ex.P6 and P7, they mentioned that loan was disbursed to various vendors without the approval of Regional Office and Head Office; however, admitted that subsequently they noticed that during the investigation of CBI, such 67 Spl.CC.No.37/2015 approval was obtained. Thus, it is clearly goes that, the internal investigation team has mechanically conducted the investigation as to irregularities allegedly committed by accused No.1 while sanctioning the loan to accused No.2-Company, without examining the actual facts.
73. Thus, from the above evidence of prosecution, it is clear that the prosecution has miserably failed to establish its case against accused No.1 that he had criminal conspiracy with accused No.3 and thereby cheated United Bank of India by sanctioning credit facility to the tune of Rs.16 Crores to accused No.2- Company, illegally and against the rules and regulations of the Bank and thereby caused loss to the Bank. Allegation as to acceptance of Bribe by Accused No.1:
74. It is another serious allegation against accused No.1 that, he has accepted Rs.7 Lakh as Bribe from accused No.3 as a reward for sanctioning the loan to accused No.2-Company. It is the very case of the prosecution that the bribe amount of Rs.7 lakhs was paid to accused No.1-Sri.Pranab Kumar Roy by accused No.3- Sri.D.Ravi Kumar, through middlemen viz., PW.27- 68 Spl.CC.No.37/2015 Sri.Gaurav Pradhan, PW.28-Sri.Debasis Das and PW.29- Sri.Arup Kumar Bose in the mid November of 2009. However, in this regard, there is no direct evidence adduced by the prosecution to show that accused No.1 has demanded bribe from accused No.3 and accepted Rs.7 Lakh. But the prosecution has relied upon the statements of PW.27 to PW.29 recorded by the Magistrate U/Sec.164 of Cr.P.C., in order to prove the acceptance of Rs.7 Lakh as bribe or reward by accused No.3.
75. Now, let me appreciate the Sec.164 Statements of PW.27 to PW.29 and also their respective oral evidence, in order to know how far said witnesses have supported the prosecution in respect of acceptance of Rs.7 Lakhs as bribe by the accused No.1.
76. The evidence of PW.27-Sri.Gaurav Pradhan goes to show that, he knows accused No.1-Sri.Pranab Kumar Roy and also knows CW.32-Arup Kumar Bose personally. In the year 2009, CW.32-Arup Kumar Bose was looking for an office premises for some one else and as this witness had an office premises taken on rent, hence wanted to sublet it. He agreed to give the said 69 Spl.CC.No.37/2015 premises on rent when asked by Arup Kumar Bose and told him to pay advance amount of Rs.7 lakhs. During the month of September or October, 2009, said Arup Kumar Bose gave him Rs.7 lakhs as advance to take the said premises on rent; however, in the month of October or November, 2009, said Sri.Arup Kumar Bose informed him that he does not need the office premises and asked him to refund the advance amount to him; accordingly, this witness has returned said amount of Rs.7 lakhs in cash to Sri.Arup Kumar Bose by wrapping it in a paper. The evidence of this witness also goes to show that, he accompanied said Sri.Arup Kumar Bose near United Bank of India, Dalhousie, Kolkata; where one person came there and Sri.Arup Kumar Bose handed over the amount of Rs.7 lakhs to said person in his presence. This witness has identified his statement recorded U/Sec.164 of Cr.P.C., before Magistrate which is marked as Ex.P115.
77. However, in his cross-examination done by accused No.1, PW.27 stated that CBI officials told him that whatever he has stated before them, has to be signed before the court and he does not remember whether oath 70 Spl.CC.No.37/2015 was administered by the Magistrate while recording his statement. He further stated that, the statement marked at Ex.P115 was not typed before him but the statement was already there but they asked him to put his signature and he does not know the contents of the statement. During his cross examination done by accused No.2 and 3, PW.27 has stated that he does not know anything else except the advance amount of Rs.7 lakhs paid to him by Sri.Arup Kumar Bose for the premises to be let out on rent. He admitted a suggestion to the effect that, he has refunded the advance amount of Rs.7 lakhs since the premises was not taken on rent. He further stated that, except said transaction, he does not know anything else. Thus, from the testimony of this witness, nothing concrete was elicited by the prosecution to prove the allegation of bribe.
78. Further, the evidence of PW.28-Sri.Debasis Das, in his examination-in-chief, goes to show that, accused No.1 is the father of one Suman Kumar Roy; under whom, he was working during the year 2009. He used to attend whatever work entrusted to him by 71 Spl.CC.No.37/2015 Sri.Pranab Kumar Roy and his son Sri. Suman Kumar Roy. This witness has further deposed that, he does not remember about receiving any parcel from any person near United Bank of India, Dalhousie, Kolkata at the instance of accused No.1-Sri.Pranab Kumar Roy. As this witness has not supported the prosecution case, this witness has been cross-examined by Learned Public Prosecutor by treating him as hostile. During his cross- examination by the prosecution, this witness has admitted that he went near United Bank of India, Dalhousie, Kolkata as told by accused No.1-Sri.Pranab Kumar Roy; but stated that, he has not attended any work at the instance of Sri.Pranab Kumar Roy since he has not told him to bring anything. Further, he denied a suggestion that, as per the instructions of accused No.1- Sri.Pranab Kumar Roy, he went near United Bank of India, Dalhousie, Kolkata and collected a pocket wrapped up by cello-tape said to be containing Rs.7 lakhs cash and received it from a person and handed over to accused No.1-Sri.Pranab Kumar Roy. Further, this witness has denied another suggestion to the effect that accused 72 Spl.CC.No.37/2015 No.1-Sri.Pranab Kumar Roy stated that he has given his mobile number [means the mobile number of this witness] to one person and that person will call him to meet near United Bank of India Dalhousie, in turn, he has to collect the amount given by him and to handover the same to him [that is, to accused No.1]. This witness further denied that said person called him and he went near the United Bank of India and two persons came there and one person handed over the cover containing Rs.7 lakhs and he received it and thereafter, he handed over it to accused No.1-Sri.Pranab Kumar Roy. The said portion of the statement is marked by the prosecution as per Ex.P116. Further, this witness admitted that he was taken before the Magistrate court, where his statement was recorded and he has put his signature on the said statement. The said statement has been marked as Ex.P117 upon its identification.
79. However, during his cross-examination done by the accused No.1, PW.28 has stated that, his statement was recorded in the court by making him to stand in the witness box, he was asked by the Magistrate 73 Spl.CC.No.37/2015 and he has given answers to his questions and he told before the Magistrate that he used to attend the work as per the instructions of accused No.1-Sri.Pranab Kumar Roy. He further stated in his cross that, accused No.1- Sri.Pranab Kumar Roy has never asked him to receive a bundle containing cash of Rs.7 lakhs. This witness has further stated in his cross-examination that the CBI Police have asked him to tell before the Magistrate that he has received parcel from one person near United Bank of India and handed over to accused No.1-Sri.Pranab Kumar Roy, if he says the above statement before the court, he will left free; therefore, he has stated before the Magistrate, accordingly. Further, this witness also stated that, the CBI officer had threatened him that, he would be put behind the bar if he does not state before the Magistrate as stated above. He further stated that Ex.P117 was already got ready and he was asked to put his signature on the same and he does not know the contents of Ex.P117. Thus, this witness has also retracted from his Sec.164 statement in his oral evidence. 74 Spl.CC.No.37/2015
80. Further, the evidence of PW.29-Sri.Arup Kumar Bose, in his examination-in-chief, goes to show that, he knows accused No.1-Sri.Pranab Kumar Roy. His firm name was M/s.Baba Satyanarayana Trading Co. He has a current account in Vijaya Bank which was in operation during the year 2009. One Sri. Ravi Kumar [i.e. accused No.3] has credited Rs.2 lakhs at one time and Rs.5 lakhs on another occasion to his said current account through RTGS and Ravi Kumar told him to find an office premises in Kolkata on rent. Therefore, he contacted his friend Gaurav Pradhan since he had premises and he was ready to give premises on rent with advance of Rs.7 lakhs and accordingly, he gave him Rs.7 lakhs as advance for the said premises; but after 20 days, said Ravi Kumar had called him over telephone and asked to refund the said advance amount of Rs.7 lakhs since they found another suitable premises and further told to refund the said amount to a person to whom they have given his account number and the said person will come and meet him; accordingly, the said person called him and told to come near the Head Office of United 75 Spl.CC.No.37/2015 Bank of India, Dalhousie, Kolkata. Accordingly, himself and Sri.Gaurav Pradhan together went near United Bank of India, said person came there and collected the packet containing Rs.7 lakhs from him and went away. He further stated that accused No.1-Sri.Pranab Kumar Roy has not requested him to find a premises on rent.
81. As above said witness has not supported the prosecution case; therefore, the learned Sr. Public Prosecutor has cross-examined this witness by treating him as hostile. During his cross-examination by the prosecution, this witness has stated that, he has not dealt with any business with accused No.3-Sri.D.Ravi Kumar. Further, he stated that, he does not know from whom said Ravi Kumar got his telephone number and he did not request Sri.Ravi Kumar to deposit the amount into his account prior to negotiations in respect of premises. Further, this witness has admitted in his cross that, the CBI police took him to the court for recording statement and his statement was recorded at Court and his statement was taken in the court by the judge, but CBI police have not recorded his statement in the Court. 76 Spl.CC.No.37/2015 His statement recorded before the Magistrate has been marked as Ex.P118. This witness further stated that Ex.P118 was not recorded in the court and he denied that accused No.1-Sri.Pranab Kumar Roy told him over telephone that he has given his bank account number to one Sri.Ravi Kumar and said Sri.Ravi Kumar will remit an amount to his account and further asked him to keep the said amount with him. This witness has further denied that, accordingly, Sri.Ravi Kumar remitted Rs.2 lakhs and subsequently, Rs.5 lakhs through RTGS to his bank account. He further denied that, accused No.1- Sri.Pranab Kumar Roy gave contact mobile phone number of Sri.Ravi Kumar's person and asked him to meet him near Head Office of United Bank of India, Kokkata and to return the amount of Rs.7 lakhs. It is further denied that, after handing over the amount of Rs.7 lakhs to that person, he telephoned accused No.1- Sri.Pranab Kumar Roy and told the said fact. Further, this witness has been cross-examined by the accused No.1. During his cross-examination, this witness has stated that the CBI Officer has brought him to the court 77 Spl.CC.No.37/2015 for recording statement and he has not read the contents of Ex.P118 before signing, but it was read over to him in English and he did not follow.
82. Thus, on perusal of entire evidence of PW.27 to PW.29, there is no any piece of evidence which would suggest that the amount of Rs.7 Lakh has been given to accused No.1 through the account of PW.30-Arup Kumar Bose, as a reward for sanctioning the loan to accused No.2-Company. In fact, the very evidence of PW.27 to PW.29 goes to show that, the alleged Rs.7 Lakh has been transferred to the account of PW.29 as a rent advance for purpose of office premises. Even the Sec.164 statements of PW.27 to PW.29 did not disclose that said amount was given to accused No.1 by the accused No.3 as bribe.
83. It is the contention of learned Public Prosecutor that, PW.27, PW.28 and PW.29 have specifically stated in their respective statements recorded before the learned Magistrate U/Sec.164 of Cr.P.C., regarding payment of Rs.5 Lakhs and Rs.2 Lakhs to the account of M/s. Baba Sathynarayana & Co., on two occasions through RTGS; in turn, said amount of Rs.7 78 Spl.CC.No.37/2015 Lakhs was handed over to the wife of accused No.1. He further contended that, receiving of Rs.7 Lakh by the accused No.1 is most important 'fact in issue' and Sections 5, 6 and 8 of Indian Evidence Act are fairly apply to the case of prosecution.
84. It is his further contention that, though PW.27, PW.28 and PW.29 have been retracted from their respective statements recorded U/Sec.164 of Cr.P.C., but their statements have to be appreciated in view of Sec.157 of Indian Evidence Act. As per Sec.157 of Indian Evidence Act, a statement U/Sec.164 Cr.P.C. could be used for both corroboration and contradiction and it could also be used to corroborate the testimonies of other witnesses. The circumstances found in the evidence of PW.27, PW.28 and PW.29 clearly goes to show that, the bribe amount was received by the accused No.1 as a reward for sanctioning the loan in favour of accused No.2-Company.
85. Further, it is also contended by the learned Public Prosecutor that, it is true that, in the case on hand, PW.27 to PW.29 have been retracted from their 79 Spl.CC.No.37/2015 respective statements; however, the circumstances suggest that said witnesses have been won over by the accused No.1, therefore the Court has to examine the circumstances in which the statement was recorded and the reasons stated by the witnesses for retracting from the statement.
86. It is true that statements recorded by the Magistrate U/Sec.164 of Cr.P.C., stand on different footage compared to statements recorded U/Sec.161 and 162 of Cr.P.C., recorded by the police. However, the relevancy, admissibility and reliability of statements recorded U/Sec.164 of Cr.P.C. are depending upon the facts and circumstances of each case. It is settled law that, a statement U/Sec.164 of Cr.P.C., could be used for both corroboration and contradiction and also to corroborate the testimonies of other witnesses.
87. It is true that PW.27 to PW.29 have given their respective statements U/Sec.164 of Cr.P.C., before the Magistrate. However, in their respective oral evidence, they have denied material part of their respective Sec.164 statements and thereby, they retracted from their 80 Spl.CC.No.37/2015 statements. The reason for retraction of his statement by PW.27 is that, the CBI official told him that whatever he has stated before them, has to be signed before the Court. Further, this witness has deposed his statement marked at Ex.P115 was not typed before him but the statement was already there and he does not know the contents of his statement. Further, the reason for retraction of his statement by PW.28 is that, the CBI Police have asked him to tell before the Magistrate that he has received parcel from one person near United Bank of India and handed over to accused No.1-Sri.Pranab Kumar Roy, if he says so before the court, then he will be left free; therefore, he has stated before the Magistrate, accordingly. Further, this witness also stated that, the CBI officer had threatened him that, he would be put behind the bar if he does not state before the Magistrate as stated above. He further stated that Ex.P117 was already got ready and he was asked to put his signature on the same and he does not know the contents of it. Further, though PW.29 has admitted during his cross examination done by the prosecution that his statement 81 Spl.CC.No.37/2015 was recorded in the court; but, at the same time, he has answered that the CBI police had brought typed statement, looking to the name and his father's name typed in the statement, the judge confirmed it, when he was questioned by the prosecution as to 'where did the court recorded his name and his father's name ?'. Further, this witness has specifically stated that Ex.P118 [i.e. his statement U/Sec.164 of Cr.P.C.] was not recorded in the court. Further, PW.29 has specifically denied material parts of his statement as per Ex.P119 and Ex.P120. Thus, this way, PW.27 to PW.28 have retracted from their statements recorded U/Sec.164 of Cr.P.C.
88. It is important to note here that, in catena of judgments, the Hon'ble Supreme Court, has time and again held that, the statement recorded U/Sec.164 of Cr.P.C., is not considered as a substantive piece of evidence on its own feet, but oral evidence of that particular witness deposed before the court and subjected to cross examination, then it can be a substantive piece of evidence.
82 Spl.CC.No.37/2015
89. In the case of VIJAYA SINGH & ANR. VS.
STATE OF UTTARAKHAND [2024 INSC 905], the Hon'ble Supreme Court has held in Paragraph No.27 & 28 that,
27. The jurisprudence concerning a statement under Section 164 CrPC is fairly clear. Such a statement is not considered as a substantive piece of evidence, as substantive oral evidence is one which is deposed before the Court and is subjected to cross examination. However, Section 157 of Indian Evidence Act, 1872 makes it clear that a statement under Section 164 CrPC could be used for both corroboration and contradiction. It could be used to corroborate the testimonies of other witnesses. In R. Shaji v. State of Kerala, this Court discussed the two-fold objective of a statement under Section 164 CrPC as:
"15. So far as the statement of witnesses recorded under Section 164 is concerned, the object is two fold; in the first place, to deter the witness from changing his stand by denying the contents of his previously recorded statement, and secondly, to tide over immunity from prosecution by the witness under Section 164. A proposition to the effect that if a statement of a witness is recorded under Section 164, his evidence in Court should be discarded, is not at all warranted ..."
The Court also recognized that the need for recording the statement of a witness under Section 164 CrPC 83 Spl.CC.No.37/2015 arises when the witness appears to be connected to the accused and is prone to changing his version at a later stage due to influence. The relevant para reads thus:
"16. ... During the investigation, the Police Officer may sometimes feel that it is expedient to record the statement of a witness under Section 164 Code of Criminal Procedure. This usually happens when the witnesses to a crime are clearly connected to the accused, or where the accused is very influential, owing to which the witnesses may be influenced ..."
28. Considering the conceptual requirement of recording a statement before a Judicial Magistrate during the course of investigation and the utility thereof, as prescribed in Section 157 of Evidence Act, it could be observed that a statement under Section 164, although not a substantive piece of evidence, not only meets the test of relevancy but could also be used for the purposes of contradiction and corroboration. A statement recorded under Section 164 CrPC serves a special purpose in a criminal investigation as a greater amount of credibility is attached to it for being recorded by a Judicial Magistrate and not by the Investigating Officer. A statement under Section 164 CrPC is not subjected to the constraints attached with a statement under Section 161 CrPC and the vigour of Section 162 CrPC does not apply to a statement under Section 164 CrPC. Therefore, it must be considered on a better 84 Spl.CC.No.37/2015 footing. However, relevancy, admissibility and reliability are distinct concepts in the realm of the law of evidence. Thus, the weight to be attached to such a statement (reliability thereof) is to be determined by the Court on a case-to-case basis and the same would depend to some extent upon whether the witness has remained true to the statement or has resiled from it, but it would not be a conclusive factor. For, even if a witness has retracted from a statement, such retraction could be a result of manipulation and the Court has to examine the circumstances in which the statement was recorded, the reasons stated by the witness for retracting from the statement etc. Ultimately, what counts is whether the Court believes a statement to be true, and the ultimate test of reliability happens during the trial upon a calculated balancing of conflicting versions in light of the other evidence on record.
90. Further, in the case of T.Diwakara and Others Vs. State of Karnataka reported in ILR 2006 KAR 4632, the Hon'ble High Court of Karnataka has held that, "The statement recorded under Section 164 of Criminal Procedure Code does not have any better legal status than the one recorded under Section 161(3) of the Code. 85 Spl.CC.No.37/2015
At the most, if the deponent whose statement is recorded under Section 164 of the Code turns hostile, he/she could be prosecuted for perjury but on the strength of such statement no conviction can be placed".
91. As held in the above cited judgments, a statement under Section 164 of Cr.P.C., although not a substantive piece of evidence, not only meets the test of relevancy but could also be used for the purposes of contradiction and corroboration. However, considering the evidence on record and facts and circumstances of the case on hand, even there is no material evidence brought out by the prosecution so as to contradict or corroborate with the statements of PW.27 to PW.29 recorded under Sec.164 of Cr.P.C. Except PW.27 to PW.29, none of the prosecution witnesses have deposed regarding alleged bribe of Rs.7 Lakh.
92. Even PW.38-A.Inbazhagan, who is the investigating officer in RC No.16(A)/2013 [i.e. Spl.C.No.38/2015], has deposed that, during 86 Spl.CC.No.37/2015 investigation in connection with RC 16(A)/2013, after scrutinizing the account statement of current account No.0884050108584 belonging to M/s. Acropetal Technologies Pvt. Ltd., Bengaluru maintained with United Bank of India, Contonment Branch, Bengaluru, it was found that, on 09.10.2009 an amount of Rs.5 Lakhs was transferred from said account to the account bearing No.723200301000056 maintained at Vijaya Bank, Burdwan Branch, West Bengal belonging to one M/s.Baba Satyanarayana Co., [owned by PW.29] and he also came to know that, on 10.07.2009 another amount of Rs.2 Lakhs was transferred from current account No.67042921027 belonging to M/s. Acropetal Technologies Pvt Ltd., maintained with State Bank of Travancore, Industrial Finance Branch, Bengaluru to the account of M/s. Baba Sathynarayana Co., of PW.29.
93. Thus, even from the evidence of PW.38, it goes to show that, the said amount of Rs.7 Lakh, as stated by him as above, was transferred to the account of M/s. Baba Sathynarayana Co., of PW.29-Sri.Arup Kumar Bose from the current account No.67042921027 of M/s. 87 Spl.CC.No.37/2015 Acropetal Technologies Pvt Ltd., which is another company owned by accused No.3-D.Ravikumar.
94. It is significant to note here that, the prosecution is not clear in accusing that whether alleged bribe of Rs.7 Lakh is for the sanction of loan to accused No.2-M/s. Binary Spectrum Softech Pvt. Ltd., or whether it is for the sanction of loan to M/s.Acropetal Technologies Pvt Ltd or for both. It is because, PW.38- Sri.A.Inbazhagan [who conducted investigation in respect of RC No.16(A)/2013 (Spl.C.No.38/2015)] has specifically deposed that, 'during the investigation it was revealed that accused No.1 has obtained quid pro quo from accused No.3 for sanction of loan to M/s. Acropetal Technologies Pvt. Ltd'. However, so far as this case is concerned, prosecution version is that accused No.1 has obtained Rs.7 Lakh as bribe from accused No.3 for sanctioning loan to accused No.2-M/s. Binary Spectrum Softech Pvt.Ltd. Thus, the above stated piece of evidence of PW.38 goes against the very case of prosecution so far as allegation of acceptance of bribe by 88 Spl.CC.No.37/2015 the accused No.1 for sanctioning loan to accused No.2- Company.
95. It is further argued by the learned Public Prosecutor that, though there is no direct evidence to establish that accused No.1 has obtained the bribe of Rs.7 Lakhs as reward for sanctioning of loan to accused No.2-Company, but there is reliable circumstantial evidence adduced by the prosecution to connect the accused No.1 with acceptance of bribe. In this regard, the learned Public Prosecutor has again relied upon the statements of PW.27 to PW.29 recorded before Magistrate U/Sec.164 of Cr.P.C. Further, in support of his contention, the learned Public Prosecutor has relied upon a judgment of Hon'ble Apex Court passed in the case of Sharad Birdhichand Sarda Vs. State of Maharashtra, [ (1984) 4 SCC 116].
96. That the Hon'ble Apex Court in the case of Sharad Birdhichand Sarda vs State of Maharashtra, reported in (1984) 4 SCC 166, while dealing with circumstantial evidence has held that, the onus was on the prosecution to prove that the chain is complete and 89 Spl.CC.No.37/2015 the infirmity of lacuna in the prosecution cannot be cured by a false defense of plea. The condition precedent before conviction could be based on circumstantial evidence must be fully established and they are;
1) The circumstances from which the conclusion of guilt is to be drawn should be fully established. The circumstances concerned must or should and not may be established;
2) The facts so established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty;
3) The circumstances should be of a conclusive nature and tendency;
4) They should exclude every possible hypothesis except the one to be proved; and
5) There must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the - innocence of the accused and must show that in all human probability the act must have been done by the accused.
97. Further, the Hon'ble Apex Court in the case of Gagan Kanojia and another Vs. State of Punjab [(2006) 13 Supreme Court cases 516], has laid down the principle of law that when a prosecution case is solely based on a circumstantial evidence how to appreciate the 90 Spl.CC.No.37/2015 evidence. In the said case at Paragraph No.9, it was held that:
"9. The prosecution case is based on circumstantial evidence. Indisputably, charges can be proved on the basis of the circumstantial evidence, when direct evidence is not available. It is well-settled that in a case based on a circumstantial evidence, the prosecution must prove that within all human probabilities, the act must have been done by the accused. It is, however, necessary for the courts to remember that there is a long gap between 'may be true' and 'must be true'. Prosecution case is required to be covered by leading cogent, believable and credible evidence. Whereas the court must raise a presumption that the accused is innocent and in the event two views are possible, one indicating to his guilt of the accused and the other to his innocence, the defence available to the accused should be accepted, but at the same time, the court must not reject the evidence of the prosecution, proceeding on the basis that they are false, not trustworthy, unreliable and made on flimsy grounds or only on the basis of surmises and conjectures. The prosecution case, thus, must be judged in its 91 Spl.CC.No.37/2015 entirety having regard to the totality of the circumstances. The approach of the court should be an integrated one and not truncated or isolated. The court should use the yardstick of probability and appreciate the intrinsic value of the evidence brought on records and analyze and assess the same objectively."
98. It is no doubt true that, a conviction can be recorded solely on the basis of reliable circumstantial evidence. However, as held in the above cited decisions of Hon'ble Supreme Court, in a case based on a circumstantial evidence, the prosecution must prove that within all human probabilities, the act must have been done by the accused. In the case on hand, except the unreliable evidence of PW.27 to PW.28, there is no cogent evidence to show that the amount of Rs.7 Lakh which was referred in the evidence of PW.27 to PW.29 and PW.38, was the bribe amount obtained by accused No.1 as quid pro quo, from accused No.3 for sanction of loan for accused No.2-M/s. Binary Spectrum Softech Pvt Ltd. When we apply the five principles laid down in the case of Sharad Birdhichand Sarda Vs. State of 92 Spl.CC.No.37/2015 Maharashtra to the facts of case on hand, it is very difficult to accept that merely on relying the statements of PW.27 to 29 recorded U/Sec.164 of Cr.P.C., accused No.1 can be convicted for the alleged charge of bribe. It is because, the facts, circumstances and evidence relied upon by the prosecution, in the case on hand, is not sufficient enough to establish the guilt of the accused No.1 in stating unequivocally that accused No.1 has obtained Rs.7 Lakh as bribe. The prosecution has failed in showing that the circumstances found in the prosecution evidence should be of a conclusive nature and tendency, in directing the accused No.1 is guilty of receiving bribe amount of Rs.7 Lakh. Even there is no chain of evidence which connect the accused No.1 in accepting the bribe amount of Rs.7 Lakh as alleged by the prosecution. On appreciating of entire of evidence of prosecution and on examining the circumstances upon which the prosecution has relied, it cannot be said that the prosecution has shown that in all human probability, the bribe amount of Rs.7 Lakh must have been received by the accused No.1. Therefore, this court is of the 93 Spl.CC.No.37/2015 considered opinion that, the prosecution has miserably failed in proving that accused no.1 has obtained Rs.7 Lakh as bribe or reward from accused No.3 for sanctioning loan to accused No.2-Company, beyond reasonable doubt.
99. It is the first and foremost burden on the prosecution that, accused No.1, being a Public Servant, has demanded or requested accused No.3 a pecuniary advantage for sanctioning of loan to accused No.2- Company and thereafter, he has obtained pecuniary advantage of Rs.7 Lakhs as bribe by corrupt or illegal means and by abusing his position as loan sanctioning authority. In the case of A. Subair Vs. State of Kerala reported in 2009 Cr.L.J.3450, it is held that:
"The legal position is no more res integra that primary requisite of an offence under Section 13 (1) (d) of the Act is proof of demand or request for valuable thing or pecuniary advantage from the public servant. In other words, in the absence of proof of demand or request from the public servant for a valuable thing or pecuniary 94 Spl.CC.No.37/2015 advantage, the offence under Section 13 (1)
(d) cannot be held to be established."
100. Further, the Hon'ble Apex Court while dealing with provision under Sec.5(1)(d) of PC Act, 1947 [akin to Sec.13(1) (d) of PC Act 1988] in the case of S.P.Bhatnagar and another vs. State of Maharashtra, reported in AIR 1979 SC 826, held as under:
"The abuse of position in order to come within the mischief of S.5 (1)(d) must necessarily be dishonest so that it may be proved that the Accused caused deliberate loss to the department. It is for the prosecution to prove affirmatively that the Accused by corrupt or illegal means or by abusing his position obtained any pecuniary advantage for some other person".
101. However, in the case on hand, as already discussed above, the prosecution has failed in establishing that accused No.1, being a public servant, with dishonest intention, has conspired with accused No.2 and 3 and sanctioned loan to accused No.2- company by accepting inflated properties as collateral 95 Spl.CC.No.37/2015 security and not following banking procedure prevailed at that time and also accepted Rs.7 Lakh as reward/pecuniary advantage from accused No.3 for sanction of loan to accused No.2-Company and caused loss to United Bank of India and thereby committed criminal misconduct punishable U/Sec.13(1) (d) of Prevention of Corruption Act. As already discussed at aforesaid paragraphs, the very prosecution material witnesses themselves have specifically deposed that, there is no any irregularity committed by accused No.1 in sanctioning the loan and the very evidence of prosecution, both oral as well as documentary, show that PW.5-Sri.A.Banarjee, Branch Manager has forwarded the loan proposal of accused No.2-Company to Regional office; PW.31-Sri. K. R. Tamil Selvan and PW.32-Sri. T. S. Sudarshan attached to Regional Office, have initiated the proposal; PW.3-Sri.C.Balachandran, then AGM has recommended the loan proposal; and PW.34- Sri.Seetharaman and PW.35-Sri.R.Annachamy both Senior Managers, who are the members of Credit Committee, have approved the proposal; and thereafter, 96 Spl.CC.No.37/2015 accused No.1 being the sanctioning authority, has accorded his sanction for the loan proposal of accused No.2-Company. Therefore, the prosecution has not succeeded in proving the charges levelled against accused No.1.
The charge against accused No.2 and 3:
102. Now, coming to charge levelled against accused No.2 and 3, it is alleged that, the accused No.3- D.Ravikumar being the Director of accused No.2-M/s.Binary Spectrum Softech Pvt. Ltd., had criminally conspired with accused No.1, then General Manager, SRO, Chennai and in pursuance of said conspiracy, the accused No.2-Company duly represented by accused No.3-D.Ravi Kumar, applied for a loan for the purpose of purchasing a software product called 'MEDITS' from an overseas vendor by name M/s.Optech Consulting Inc., Texas, USA, by inflating the value of properties offered as collateral security and as a result, accused No.1 has sanctioned credit facility of Rs.14 Crores as Term Loan and Rs.2 Crores as Working Capital to the Accused No.2-M/s.Binary Spectrum Softech Pvt. 97 Spl.CC.No.37/2015 Ltd., by entering into illegal agreement with accused No.2 and 3; and thereby, accused No.2 and 3 have dishonestly induced the United Bank of India to sanction Rs.16 Crores as loan for the purpose of procuring software product 'MEDITS' from an overseas vendor, and after sanction, they diverted said loan amount for the purpose other than for which it was sanctioned and as a result, the account of accused No.2-Company became NPA, thereby they caused wrongful loss to United Bank of India, Bengaluru Branch, Bengaluru to the tune of Rs.13,53,39,706/-, and thereby cheated the Bank and thereby accused No.2 and 3 have committed offences punishable U/Sec.120-B and 420 of Indian Penal Code.
103. Before proceeding to the evidence brought out by the prosecution against accused No.2 and 3, at this juncture, it is important to note here that, already this court, in the aforesaid Paragraphs, has held that the prosecution has failed to establish their case that accused No.1 in conspiracy with accused No.2 and 3, has sanctioned the loan to accused No.2-company. Rather, this court has already come to the conclusion that the 98 Spl.CC.No.37/2015 loan to accused No.2-Company has been sanctioned by accused No.1 only on the basis of recommendation from recommending authority and approval from the Credit committee at Regional Office level and the prosecution has not produced cogent materials to show that, there is any conspiracy, cheating and criminal misconduct on the part of accused No.1 in sanctioning loan illegally in favour of accused No.2-Company. Therefore, when already this court has formed an opinion that there is no material to prove the theory of conspiracy against accused No.1, then it is the same opinion even for accused No.2 and 3 also. It is because, it is the very case of prosecution that, the accused No.2 and 3 have conspired with accused No.1 and got succeeded in sanctioning loan from accused No.1 by submitting inflated properties. However, the material evidence on record speaks contrary. The Bank Officers, who are examined as material witnesses for the prosecution case, have unequivocally deposed in their respective evidence that, the loan proposal of accused No.2-Company was in conformity with the lending policy for that period; and 99 Spl.CC.No.37/2015 loan has been properly processed, recommended, approved and finally, sanctioned by the accused No.1. Therefore, this court is of the opinion that, even the prosecution has failed to brought out the cogent and convincing evidence to prove the allegation of conspiracy against accused No.2 and 3.
104. In order to attribute criminal conspiracy against accused No.1 to 3, the prosecution has to prove that they were having mens rea, knowledge about indulgence in doing an illegal act or a legal act by illegal means with each other. A plain reading of provision under offence of criminal conspiracy, makes it very clear that, meeting of minds of two or more persons for doing or causing to be done an illegal act or an act by illegal means is sine qua non for the offence of criminal conspiracy as held in the case of Rajiv Kumar Vs. State of U.P. [(2017) 8 SCC 791].
105. Having held that prosecution has failed in proving the charge U/Section 120-B of IPC, even against accused No.2 and 3 also; now, let me examine the prosecution evidence in order to know whether the 100 Spl.CC.No.37/2015 accused No.2 and 3 have cheated the United Bank of India, Bengaluru Branch by submitting inflated properties as collateral security and by concealing the true facts of properties offered as collateral security and got sanctioned the loan of Rs.16 Crores from accused No.2-Company; and thereafter, failed to repay the loan amount and due to which, the account became NPA and thereby, the accused No.2 and 3 have committed the offence punishable U/Sec.420 of IPC.
106. At this juncture, it is apt to reproduce here the relevant provision of Sec.415 and Sec.420 of IPC, for better understanding. Section 415 of IPC, provides the definition part of cheating, as under:
415.Cheating:- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induce the person so deceived to do or omit to do anything which he would not do or omit if he was not so deceived, and which act of omission causes or is likely to cause damage or harm to that person in 101 Spl.CC.No.37/2015 body, mind, reputation or property, is said to "cheat".
Explanation: - A dishonest concealment of facts is a deception within the meaning of this section.
Further, Section 420 of IPC provides for punishment for cheating and dishonestly inducing delivery of property, which reads as under:
420. Cheating and dishonestly inducing delivery of property - Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
Thus, the necessary ingredients to attract the offence U/Sec.420 IPC are as under:
1. There shall be element of Cheating.
2. There shall be dishonest inducement to deliver property.102 Spl.CC.No.37/2015
3. There shall be mens rea of the accused by the time of making inducement.
107. Therefore, it is the heavy burden on the prosecution to prove that, accused No.2 and 3 had mens rea or meeting of minds with accused No.1 with dishonest intention, have cheated the United Bank of India to part with loan of Rs.16 Crores for accused No.2- Company for procuring software product from M/s.Optech Consulting Inc., Texas, USA, by providing inflated properties as collateral security and after sanction of loan, accused No.2-Company has diverted the said loan amount for other purpose. Further, even after restructuring of the loan account, the accused No.3- D.Ravikumar had willfully defaulted repayment schedule and the account became NPA on 25.10.2012 with outstanding balance with interest of Rs.13,53,39,706/- as on 30.09.2012. Thus, the accused No.3-D.Ravi Kumar, knowing fully well about the fact that the valuation of two properties provided as collateral security is over-valued submitted false information by suppressing the real facts; 103 Spl.CC.No.37/2015 and also colluded with accused No.1-Pranab Kumar Roy in getting the loan sanctioned for his company by name M/s.Binary Spectrum Softech Pvt. Ltd., Bengaluru.
108. At this stage, it is necessary to examine whether accused No.2-Company was having valid and marketable title in respect of land measuring 36 Guntas in Sy.No.110 of Doddathoguru Village, Begur Hobli and land measuring 1 acre in Sy.No.95 Anjanapura Village, Bengaluru South Taluk to create equitable mortgage in favour of United Bank of India, Bengaluru Branch for the purpose of borrowing loan in favour of accused No.1- Company or not. Further, it is also important to examine whether there was a suppression of material facts with regard to properties submitted as collateral security and whether there was a criminal conspiracy or mala-fide intention on the part of accused No.3 while borrowing huge sum of loan for accused No.2-Company, by submitting inflated properties as alleged by the prosecution.
109. In this regard, the prosecution has relied upon the evidence of PW.2. As per evidence of PW.2- 104 Spl.CC.No.37/2015 Sri.Divakar Bhattacharjee, who conducted the internal investigation into the irregularities in the account of M/s. Binary Spectrum Softech Pvt. Ltd., the Loan Amount of Rs.16 Crores [Term loan of Rs.14 crores and Cash Credit Limit of Rs.2 Crores] was sanctioned to accused No.2- Company; the loan was procured on the primary security of the software package proposed to be procured with the help of loan and it was also additionally secured by way of equitable mortgage of initially one property stated to be valued at Rs.16.82 crores and subsequently, the terms of sanction was modified for the substitution of another property valued at Rs.9.80 crores and pledgement of term deposit of Rs.6.30 crores and personal guarantee of accused No.3/D.Ravikumar, who is the Director of accused No.2-Company. Further, as per evidence of PW.2, the property situated at Doddathaguru was purchased at a price of Rs.50 lakhs during December- 2009, although the stamp duty was paid as per the guideline value amounting to Rs.2 crores, but the same property was valued at Rs.9.80 crores; however during investigation, he found that the property was overvalued 105 Spl.CC.No.37/2015 and subsequent fresh valuation of the property was also revealed the value to much less than what was valued in the year-2009. During his investigation, he further found that the properties were over valued in order to show the loan to be 100% covered by additional security.
110. However, the evidence of PW.11-Sri. M. Mohamed Ibrahim, who was a Penal Advocate for United Bank of India from 2002 to 2011, shows that as per instruction of Chief Manager, United Bank of India, Bengaluru Branch, he gave legal opinion to the Bank on 22.12.2009 as per Ex.P4(x) in respect of Sy.No.110 [New No.2385/100/1] of Doddathoguru Beguru, Hobli and another legal opinion in respect of property at Sy.No.95 of Anjanapura Village, as per Ex.P56 dated:25.03.2010, based on the documents of said properties. As per Ex.P4(x), he certified that, accused No.2-Company has a clear, valid and marketable title over property in Sy.No.110 and company is competent to create the mortgage. Further, as per Ex.P5(J), which is another legal opinion dated:22.12.2009 given by one Sri. G.N.Maiya Advocate in respect of property in Sy.No.110 of 106 Spl.CC.No.37/2015 Doddathogur village; wherein he certified that, 'M/s.Binary Spectrum Softech Pvt. Ltd is the absolute owner of converted land to the extent of 36 guntas in Sy.No.110 situated at Doddathogur village, Begur Hobli, Bangalore and they are competent to sell, alienate, mortgage etc., as the said property is their self acquired property and it is marketable'. Thus, it is very clear that there was no any suppression of material facts with regard to properties submitted as collateral security and there is valid and marketable title in respect of land measuring 36 Guntas in Sy.No.110 of Doddathoguru Village, Begur Hobli and land measuring 1 acre in Sy.No.95 Anjanapura Village, to create equitable mortgage in favour of United Bank of India.
111. Further, in order to prove that, the accused No.3-D.Ravikumar has submitted inflated properties as collateral security for obtaining loan for accused No.2- Company with dishonest intention, the prosecution has examined PW.15-Sri.V.S.Shanbhag. As per evidence of PW.15-Sri.V.S.Shanbhag, a Chartered Engineer, on the request of accused No.2-Company, he has valued the 107 Spl.CC.No.37/2015 property situated at Sy.No.110 of Doddathoguru Village and gave his report as per Ex.P44. As per Ex.P44, he valued said property at Rs.9,80,10,000/-. Further, on the request of accused No.2-Company, this witness has also valued another property situated at Sy.No.95 of Anjanapura Village and gave his report as per Ex.P47. As per Ex.P44, he valued said property at Rs.7,84,08,000/-.
112. Further, PW.36-Sri.M.Sreekrishna, who was one of the penal valuers of United Bank of India, has valued the property of accused No.2-Company situated at Sy.No.110 of Doddathoguru Village and gave report as per Ex.P45. As per his report-Ex.P45, the property is measuring 36 Guntas which is equal to 39,204 Sq.Ft., and he has valued said property at Rs.2500/- per Sq.Ft., amounting to Rs.980 lakhs [Rs.9,80,00,000/-]. He also valued the property bearing Sy.No.95 Anjanapura Village, Bengaluru South Taluk and submitted his report as per Ex.P48. As per Ex.P48, said property has an area of 1 acre, which is equal to 43,560 Sq.Ft., and he valued said property at Rs.784 lakhs [Rs.7,84,00,000/-]. This witness has stated that, he did not get collected the guidance 108 Spl.CC.No.37/2015 value from the Sub-Registrar in this case before valuing the above said properties.
113. It is relevant note here that, the valuation reports of PW.15 and PW.36 submitted as per Ex.P44 & P47 and Ex.P45 & P48 respectively, conducted in respect of properties situated at Sy.No.110 of Doddathoguru Village and Sy.No.95 Anjanapura Village, have been accepted by the Bank and the same have been forwarded along with loan proposal to Regional Office, Chennai. It is to be noted that, both PW.15 and PW.36, who are approved valuers, have valued above said two properties more or less, at similar value.
114. It is significant to note here that, when the account of accused No.2-Company became NPA due to non-payment of loan, the Bank, at the time of auction of properties of accused No.2, has conducted valuation of properties submitted as collateral security, through the Bank Paneled Valuer PW.7-Sri.K.S.Venkata Krishnan. His evidence goes to show that, as per request of Branch Manager, United Bank of India, this witness has conducted inspection of property at Sy.No.110 of 109 Spl.CC.No.37/2015 Doddathaguru Village and submitted his valuation report as per Ex.P46. As per Ex.P46, the property is measuring 39,204 Sq.Ft and he has valued said property at Rs.850/- per Sq.Ft., which totally comes to Rs.3,33,23,400/-. This witness has further conducted inspection on 14.07.2012 at another property at Sy.No.95 of Anjanapura Village and submitted his report as per Ex.P49. As per Ex.P49, the property is measuring 43,560 Sq.Ft and he has valued said property at Rs.850/- Sq.Ft., which totally comes to Rs.3,70,26,000/-.
115. Further, the Bank has also conducted valuation of said properties again through PW.21- L.S.Narayanan, a Chartered Engineer; whose evidence goes to show that, he is on the Panel of United Bank of India for valuation of property. As per instruction of Bank, he valued property situated at Sy.No.95 of Anjanapura Village and gave his report as per Ex.P39. As per Ex.P44, he valued said property at Rs.5,98,40,000/-. Further, this witness has also valued another property situated at Sy.No.110 of Doddathoguru Village and gave his report as per Ex.P40. As per Ex.P40, he valued said 110 Spl.CC.No.37/2015 property at Rs.4,64,55,250/-. However, it is not deposed by PW.21 in his evidence that when he conducted the valuation of above said properties. But, it appears from his reports at Ex.P39 and P40 that, he has conducted the valuation in the year 2014.
116. Further, the prosecution has examined PW.9, PW.23 and PW.6, in order to show that accused No.2 and 3 have managed to get overvaluation for their properties submitted as collateral security, though said properties are having lesser value in reality. That PW.9- Sri.M.K.Shantamurthy, is the Senior Sub-Registrar deposed about registered Sale Deed dated:24.03.2010 executed in favour of accused No.2-Company by PW.18- Smt.G.Jayamuni Rao pertaining to land bearing Sy.No.95 measuring 1 acre situated at Anjanapura, Uttarahalli Hobli, Bengaluru which is marked Ex.P60. As per Ex.P60, the consideration amount shown in the Sale Deed is Rs.60 lakhs and market value of said property is shown as Rs.1,20,00,000/-.
117. Further, PW.23-Smt.H.B.Harini, a Senior Sub-registrar deposed that, who deposed that as per EC 111 Spl.CC.No.37/2015 dated 02.12.2009, one Sri. B.M.Srinivas Rao S/o. Late. Mudda Reddy had sold Sy.No.110 of Doddathoguru Village for consideration of Rs.6,18,75,000/- in favour of M/s. Kinfotech Pvt. Ltd., as per entry marked at Ex.P95(a). This witness has identified registered Sale Deeds as per Ex.P95(b) and (c).
118. Further, PW.6-B.Gururaghavendra, Senior Sub-Registrar, deposed about Ex.P56-registered Sale Deed dated:04.12.2009 executed by M/s. Kinfotech Pvt. Ltd., in favour of M/s. Binary Spectrum Softech Pvt. Ltd. i.e. accused No.2. As per Ex.P56, the consideration amount shown is Rs.50 lakhs and the market value is shown as Rs.2,35,22,400/- for the purpose of registration.
119. It is all true that, as per evidence of PW.9, PW.23 and PW.6, the land in Sy.No.95 of Anjanapura Village was purchased for mere Rs.60 Lakh as per Ex.P60 and land in Sy.No.110 of Doddathogur village was purchased for mere Rs.50 Lakh as per Ex.P50; but it is not shown by the prosecution that accused No.3 by colluding with PW.15 and PW.36, has got overvalued his above said 112 Spl.CC.No.37/2015 two properties nor PW.15 and PW.36 have deposed that they have overvalued the properties as per whims and wishes of accused No.3; rather, PW.15 and PW.36 have stated that based on relevant records and market value and guidance value, they accordingly valued the properties.
120. It is pertinent to here that, PW.1 in his cross examination has admitted that, the bank has obtained legal opinion from Panel Advocate regarding title of property. It is also admitted that, at the time of sanction, a fixed deposit of Rs.6.31 Crores was taken as an additional security which replaced by another landed property. Further, it is also admitted that, the Bank has also collected the personal guarantee of Rs.14.77 Crores. It is also admitted that, apart from above securities, there was hypothecation of software package and other movable assets. Thus, it is clear from the evidence of PW.1 that the loan was sufficiently secured.
121. Further, in his cross examination, PW.3 has specifically admitted that himself and PW.30- Sri.Baskaran Chief Manager, Bengaluru Branch together 113 Spl.CC.No.37/2015 made inspection of the Mortgaged Property and they were satisfied on the basis of valuation Report. The valuation of properties was done by Sri.M.Srikrishna who was on Panel of United Bank of India and he was a refuted valuer of the Bank and his services were satisfactory to the Branch, according to PW.3.
122. Further, in his chief evidence, PW.5 has deposed that, an officer from Regional Office and himself, have jointly inspected the Unit and the property offered for mortgage and both submitted joint report as per Ex.P5(e). But, there is no negative finding in the Ex.P5(e)- report regarding the properties offered as Mortgage. Further, PW.5 has admitted that, the inspection report of Sri.K.V.Murali, the Chief Manager, was satisfactory. This witness has further admitted that during their joint inspection they found everything in order.
123. As already stated above, in order to attract offence U/Sec.420 of IPC, the dishonest intention must be established at the very beginning of loan transaction. There is no case made out by the prosecution in order to show that, there was dishonest inducement on the part 114 Spl.CC.No.37/2015 of accused No.2 and 3 to deceive the bank to sanction the loan to accused No.2-Company. It is well founded principles of law that, the intention to cheat must have existed at the very inception of loan agreement.
124. It is on record that, the loan amount has been credited directly to the account of overseas vendor M/s.Optech Consultancy Inc., in respect of Software product. It is the version of prosecution that, the loan granted was diverted for other purpose. But there is no material produced by the prosecution to show that, accused No.2-Company has diverted the loan amount to any other purpose. None of the prosecution witnesses including investigating officer, has deposed that there is diversion of funds by the accused No.2-Company after disbursement of loan amount by the Bank. Even there is no any documentary evidence, in that regard. The evidence of prosecution itself discloses that loan amount was released to overseas vendor. So far as, inflated properties are concerned, the same are accepted by the Bank. The Valuers who have valued the properties are on the Panel of United Bank of India. Further, there is no 115 Spl.CC.No.37/2015 dispute as to title over the properties given as collateral security. Such being the case, there is no material at all to suggests that accused No.2 and 3 have cheated the Bank.
125. It is the primary burden on the prosecution to prove that accused No.2 and 3, in conspiracy with accused No.1, have obtained the loan by submitting inflated properties and by concealing true facts regarding the properties. However, in this case, it is already held that, there is no materials to show that accused No.1 had conspiracy with accused No.2 and 3 in granting the loan. Further, it is the burden on the prosecution to prove that, accused No.2-Company has diverted the funds for other purpose and thereby cheated the Bank and caused loss to the Bank. Further, there is no material produced by the prosecution that the accused No.2-company has not procured software product but used funds of loan for other purpose. Further, there is no evidence to suggest that whether I.O. had been to Texas, USA to collect materials to whether loan amount was actually received by M/s.Optech Consultancy Inc., for supply of software 116 Spl.CC.No.37/2015 product namely 'MEDITS'. It is most important to note here that, when the loan became NPA and properties were subjected for auction, then only the Bank has again valued the properties given as collateral security. But before forwarding the loan proposal or during the process of loan proposal or even before disbursing the loan amount, the Bank has not taken said exercise of valuing the properties from its reliable valuers, as done after loan became NPA.
126. It is not the case of prosecution that, the accused No.2 and 3 have submitted fake or fabricated documents while obtaining the loan from the Bank. As per Ex.P5(d), Sri.K.V.Murali Chief Manager, United Bank of India, Bengaluru Branch has conducted physical inspection to the Unit of accused No.2-Company on 10.09.2010 and in his report, he has recommended for the loan. As per Inspection Report-Ex.P5(e) submitted by PW.5 and PW.31, the inspection was conducted on 03.10.2009 and in the said report, it has been opined that, companies operations, management team and collateral security are satisfactory and no adverse 117 Spl.CC.No.37/2015 features found. Further, as per Ex.5(g)-Inspection Report submitted by PW.3 and PW.30, nothing adverse observation made. Thus being the case, the accused No.2 and 3 have submitted inflated properties as collateral security with fraudulent intent while obtaining loan and thereby cheated the Bank is not proved by the prosecution with cogent evidence.
127. It is important to note here that, the prosecution has failed to prove the core element of dishonest intention or a clear plan to defraud the bank. That siphoning off funds of loan for purposes other than for which the loan was sanctioned is strong evidence of a planned fraud; however, in the case on hand, the prosecution has failed to demonstrate that accused No.2- Company has diverted loan funds for other purpose. Mere inability to repay the loan is not sufficient enough to prove fraud. A crucial aspect in Bank fraud cases which has to be established by the prosecution in order prove the charge U/Sec.420 of IPC beyond reasonable doubt, is that the accused had the mens rea or guilty mind or dishonest intention. That mere submission of inflated 118 Spl.CC.No.37/2015 property [according to prosecution version] as collateral security is not sufficient to record conviction without the proof of intention on the part of accused No.2 and 3 to defraud the Bank.
128. It is well established that, in order to convict a person U/Sec.420 of IPC, it has to be brought on record by way of positive evidence on record that there was dishonest intention since inception. In the case on hand, the failure on part of prosecution to prove the key indicator of fraudulent intention and diversion of funds by the accused No.2, has significantly weakened its case. The fact that properties were overvalued has to be demonstrably linked to dishonest intention or fraudulent intent of accused No.2 at the time of loan was sanctioned; however, the Bank's own Panel valuer valued the properties so and if the Bank has accepted the same, then it cannot be said that the accused No.2 and 3 have defrauded the Bank by submitting inflated properties as collateral security. The burden is upon the prosecution to prove the guilt of accused beyond reasonable doubt but in the case on hand, the evidence adduced by the 119 Spl.CC.No.37/2015 prosecution including overvaluation of properties is insufficient to establish a clear, pre-meditated plan on the part of accused No.2 and 3 to defraud the Bank. The facts, circumstances and over all evidence of the present case suggest that the case of accused No.2 and 3 is mere of loan default or breach of contract rather it is not a clear cut case of criminal fraud; it is because the ingredients of cheating have not been proved by the prosecution against accused No.2 and 3, with cogent and convincing evidence.
129. In the case of Sujatha Aggarwal Vs. State of Kerala [Crl.Misc.No.4078/2019], the Hon'ble High Court of Kerala has held that, "It is well settled that the mere failure to perform a promise on the part of one of the parties to an agreement will not give rise to the offence of cheating as envisaged under Sections 415 & 420 IPC in the absence of materials to show that at the time of making the promise the accused had the fraudulent and dishonest intention to deceive the complainant or to induce him to do something which he would not otherwise do, and that such culpable intention right at the time of 120 Spl.CC.No.37/2015 entering into an agreement cannot be presumed merely from his failure to keep the promise subsequently. So also, the mere mention of words 'defraud' and 'cheat' in the complaint is not sufficient to infer that the accused had dishonest intention right from the very beginning,"
130. Further, in the case of V.P. Shrivastava Vs. Indian Explosives Ltd., reported in [(2010) 10 SCC 361], the Hon'ble Supreme Court has held at Paragraphs No.22, 24 and 25 as under;
"22. It is plain from a bare reading of the section that to hold a person guilty of cheating, as defined in Section 415 IPC, it is necessary to show that at the time of making the promise he had fraudulent or dishonest intention to retain the property or to induce the person so deceived to do something which he would not otherwise do.
24. Similar views were echoed in Medical Chemicals & Pharma (P) Ltd; wherein it was observed that: "11. ... In order to attract the provisions of Sections 418 and 420 the guilty intent, at the time of making the promise is a requirement and an essential ingredient thereto and subsequent failure to fulfill the promise by itself would not attract the provisions of Section 418 or Section 420. Mens rea is one of the essential ingredients of the offence of cheating under Section 420. As a matter of fact Illustration (g) to Section 415 makes the position clear enough to indicate 121 Spl.CC.No.37/2015 that mere failure to deliver in breach of an agreement would not amount to cheating but is liable only to a civil action for breach of contract....".
25. It is well settled that in order to constitute an offence of cheating, it must be shown that the accused had fraudulent or dishonest intention at the time of making the representation or promise and such a culpable intention right at the time of entering into an agreement cannot be presumed merely from his failure to keep the promise subsequently".
131. Further, in the the case of Satishchandra Ratanlal Shah Vs. State of Gujarat [Criminal Appeal No.09 of 2019], the Hon'ble Supreme Court has held in Paragraphs No.14 and 15 as under:
"14. Now coming to the charge under Section 415 punishable under Section 420 of IPC. In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. (See Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168). In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached the respondent no.2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, the 122 Spl.CC.No.37/2015 respondent no.2 had initiated a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material taken o their face value, no such dishonest representation or inducement could be found or inferred.
15. Moreover, this court in a number of cases has usually cautioned against criminalizing civil disputes, such as breach of contractual obligations [refer to Gian Singh v. State of Punjab, (2012) 10 SCC 303]. The legislature intended to criminalize only those breaches which are accompanied by fraudulent, dishonest or deceptive inducements, which resulted in involuntary and inefficient transfers, under Section 415 of IPC".
132. Furthermore, in the case of Deepak Gaba and Others Vs. State of Uttar Pradesh and Another, reported in (2023) 3 Supreme Court Cases 423, the 123 Spl.CC.No.37/2015 Hon'ble Supreme Court in Paragraph No.18, has held that, "18. In order to apply Section 420 IPC, namely, cheating and dishonestly inducing delivery of property, the ingredients of Section 415 IPC have to be satisfied. To constitute an offence of cheating under Section 415 IPC, a person should be induced, either fraudulently or dishonestly, to deliver any property to any person, or consent that any person shall retain any property. The second class of acts set forth in the section is the intentional inducement of doing or omitting to do anything which the person deceived would not do or omit to do, if she were not so deceived. Thus, the sine qua non of Section 415 IPC is "fraudulence", "dishonesty", or "intentional inducement", and the absence of these elements would debase the offence of cheating."
133. Thus, the principles laid down in the above mentioned decisions of Hon'ble Apex Court and High Court, make it clear that, in order to prove the offence of cheating against a person, there must be a fraudulent intent, dishonesty and intentional inducement on the part of said person. In the case on hand, there is no proof 124 Spl.CC.No.37/2015 of any inducement by accused No.2 and 3 so as to part with the loan by the Bank in favour of accused No.2- company, as on proper process, recommendation and approval, the loan has been sanctioned by accused No.1. There is no evidence to prove the fraudulent intent on the part of accused No.2-Company and accused No.3 to cheat the United Bank of India by submitting fake or fabricated documents as the valuation of properties of accused No.2-Company were done by the approved valuers of the Bank and the same were accepted by the Bank. Therefore, this court could come to conclusion that, the prosecution have miserably failed to establish offence of cheating against accused No.2 and 3. Thus, this court is of the considered view that, the prosecution has not proved the charges leveled against accused No.1 to 3, beyond reasonable doubt. Accordingly, I answered the Points No.1 to 3 in the Negative.
134. Point No.4: In the light of above discussion, I proceed to pass following:
125 Spl.CC.No.37/2015
ORDER Acting U/Sec.235(1) of Cr.P.C., the Accused No.1 to 3 are acquitted for the offences punishable U/Sec.120-B and Sec.420 r/w Sec.120-B of Indian Penal Code.
Further, acting U/Sec.235(1) of Cr.P.C., the Accused No.1 is acquitted for the offence punishable U/Sec.13(2) r/w Sec.13(1)(d) of Prevention of Corruption Act, 1988.
The Accused No.1 and 3 are set at liberty.
The Bail and Surety Bonds of Accused No.1 and 3 shall continue as contemplated U/Sec.437-A of Cr.P.C., for a period of 6 months.
[Dictated to the Stenographer Grade-I directly on the computer, corrected and then pronounced by me in the Open Court on this the 22nd day of December 2025].
[Manjunath Sangreshi] XXI Addl.City Civil and Sessions Judge & Prl.Special Judge for CBI Cases Bengaluru [CCH-4].126 Spl.CC.No.37/2015
ANNEXURE LIST OF WITNESSES EXAMINED FOR THE PROSECUTION:
PW-1: Sri. D.Sinha PW-2: Sri. Dibakar Bhattacharjee PW-3: Sri. C.Balachandran PW-4: Sri. Prasanna Kumar Bal PW-5: Sri. Arupendu Banerjee PW-6: Sri. B.Gururaghavendra PW-7: Sri. K.S.Venkata Krishnan PW-8: Sri. Kommoju Siva PW-9: Sri. M.K.Shantha Murthy PW-10: Sri. Raghunath A PW-11: Sri. M.Mohamed Ibrahim PW-12: Sri. K.S.Gururaj PW-13: Sri. Manjunath M. Nayak PW-14: Sri. K.Gopalkrishnan PW-15: Sri. V.S.Shanbhag PW-16: Sri. Madhava Reddy PW-17: Sri. M.Prashanth Kumar PW-18: Sri. G.Jayamuni Rao PW-19: Smt. R.Komala PW-20 : Sri. Mattar Prabhakar Kini PW-21 : Sri. L.S.Narayanan PW-22 : Sri. G.V.Seenappa PW-23 : Smt.H.B.Harini PW-24 : Sri. A.Sathiyamoorthy PW-25 : Sri. S.P.Srihari PW-26 : Sri. M. Srihari PW-27 : Sri. Gourav Pradhan PW-28 : Sri. Debasis Das PW-29 : Sri. Arup Kumar Bose PW-30 : Sri. K.R.Baskaran PW-31 : Sri. K.R.Tamil Selvan PW-32 : Sri. T.S.Sudarsan PW-33 : Sri. G.Raghunath PW-34 : Sri. N.Seetharaman PW-35 : Sri. R.Annachamy PW-36 : Sri. M.Sreekrishna PW-37 : Sri. L.Anbalagan 127 Spl.CC.No.37/2015 PW-38 : Sri. A. Inbazhagan PW-39 : Sri. Dhiraj Pandey PW-40 : Sri. N.Mukherjee PW-41 : Smt.Nabnita Roy PW-42 : Sri.S. Ramesh PW-43 : Sri. Ashok Kumar J.G. LIST OF WITNESSES EXAMINED FOR THE DEFENSE:
- NIL -
LIST OF EXHIBITS MARKED BY THE PROSECUTION:
Exhibit Number Description Ex.P1 Original Complaint dated 02.12.2013 of
United Bank of India to the CBI. (6 sheets) Ex.P1(a) Signature of PW.1 Ex.P2 Attested true copy of United Bank of India manual of Instructions Part-4 Volume - I Ex.P3 Certified copy of Lending Policy of United Bank of India (6 sheets) Ex.P4 One file No.40-43, captioned as Binary Spectrum Softech Pvt. Ltd., of United Bank of India R.O. correspondence regarding term loan account. (606 sheets) Ex.P4(a) Letter dt. 01.09.2009 of M/s. Binary Spectrum Softech Pvt. Ltd., Ex.P4(aa) Copy of Inspection Report dt.03.10.2009 (2 sheets) page No.8 (182 and 181) Ex.P4(b) Endorsement on P.4(a) Ex.P4(c) Signature of AGM in Ex.P4(a) Ex.P4(d) Enclosures to Ex.P.4(a) at pg.344 to 195 128 Spl.CC.No.37/2015 Ex.P4(e) Process Note dtd 20.10.2009 (pg.Nos.103 to
72) of United Bank of India, Southern Region, Chennai.
Ex.P4(e-a) Signature of PW.31 Ex.P4(e-b) Signature of PW.32 Ex.P4(e-c) Signature of PW.34 Ex.P4(e-d) Signature of Sri.Annachamy Ex.P4(f) Sanction letter dtd.23.10.2009 at pg.No.431. Ex.P4(g) Signature of accused No.1 in Ex.P.4(d) Ex.P4(h) Letter dt.08.11.2010 addressed to G.M. United Bank of India Region, Chennai at page No.454.
Ex.P4(i) Signature of accused No.1 in Ex.P.4(h) Ex.P4(j) Signature of PW.3 in Ex.P.4(b) Ex.P4(k) Signature of Chief Manager in Ex.P.4(h) Ex.P4(l) Opinion of Panel advocate Mohd.Ibrahim dated 07.01.2009 page No.452-451 Ex.P4(m) Letter dated 23.12.2009 of United Bank of India Bengaluru Branch to G.M.SRO, Chennai with enclosures.(pg.447 and 446) Ex.P4(n) Letter dated 29.12.2009 of G.M. R.O. to Chief Manager Bengaluru Branch with enclosures(page 450 to 448) Ex.P4(n-a) Signature of PW.34.
Ex.P4(n-b) Signature of Annachamy Ex.P4(n-c) Signature of L.Anbalagan Ex.P4(o) Signature of A.1 in Ex.P.4(n) Ex.P4(p) Proceedings dt 25.03.2010 of United Bank of India, SRO Chennai in respect of proposal for modifications in the terms and conditions. Ex.P4(q) Letter dtd.23.10.2010 of AGM H.O. United Bank of India to DGM, SRO regarding review of account (page 488) 129 Spl.CC.No.37/2015 Ex.P4(r) Letter dated 08.01.2010 of Chief Manager, United Bank of India Bengaluru Branch to G.M.SRO, Chennai (page No.487) Ex.P4(s) Letter dated 07.01.2009 of Mohd. Ibrahim, Advocate to Chief Manager, UBI, Bengaluru Branch (page 486 to 485) Ex.P4(t) Letter dtd.17.02.2012 from accused No.2 to the AGM, UBI, Blr Br (page Nos.563 to 559) Ex.P4(u) Letter dtd.22.12.2012 of Chief Manager, United Bank of India Bengaluru Branch to DGM and CR UP, RO, Blr. (page No.564) Ex.P4(v) Notice U/Sec. 13(2) r/w. 13(1) of SARFAESI Act (9 sheets) (page 589 to 581) Ex.P4(x) Opinion dated 22.12.2009 of Mohd. Ibrahim, Panel Advocate (Page Nos.440 to 435) Ex.P4(y) Copy of Valuation Report dt.17.09.2009 dated S.S.Industrial Consultants (2 sheets) (page Nos.370-369) Ex.P4(z) Copy of Valuation Report dt.09.10.2009 of M.Srikrishna (page Nos.385 to 377) Ex.P5 One file captioned as M/s. Binary Spectrum Softech Pvt. Ltd., (Vol.I 458 sheets) Ex.P5(a) Current A/c opening form dt.23.12.2009 of A.2 with United Bank of India Bengaluru Branch with enclosures.
Ex.P5(b) Project Idea note pertaining to A.2 prepared by Peerless Securities (54 sheets) Ex.P5(c) Request letter dt.01.09.2009 of M/s. Binary Spectrum Softech Pvt. Ltd., to AGM, UBI for term loan of 14 crores and working capital of 2 Crores (1) sheets Ex.P5(d) United Bank of India, pre-sanction Inspection Report dt.10.09.2009 submitted by K.R.Murali (1 sheet) Ex.P5(e) Inspection Report dated 03.10.2009 submitted by A.Banerjee and K.R.Tamil 130 Spl.CC.No.37/2015 Selvam (2 sheets) Ex.P5(f) Letter dt.18.10.2009 of A.2 to the AGM, UBI regarding personal guarantees and enclosures.
Ex.P5(g) Inspection Report dt.23.12.2009 submitted by C.Balachandran and K.R.Bhaskaran (2 sheets) Ex.P5(h) Letter dt.22.12.2009 of M/s. Binary Spectrum Softech Pvt. Ltd., for replacement of security (1sheet) Ex.P5(i) Letter dt.29.12.2009 from G.M. SRO, Chennai to the Chief Manager, Bengaluru Branch regarding proposal for Modification in the terms and conditions (3 sheets) Ex.P5(j) Legal opinion dt.22.02.2009 of G.N.Maiya Advocate (3 sheets) Ex.P5(k) Signature of PW.5 in Ex.P.5(c) Ex.P5(l) Sanction Communication Letter dt.24.10.2009 of AGM, UBI to A.2 company (1 sheet) Ex.P5(m) Annexure IX recommended terms of sanction enclosed to Ex.P.5(l) Ex.P5(n) Letter dt.15.10.2009 of Sri.K.Prasanna Kumar (who conducted verification) (1 sheet) Ex.P(o) Search Report and enclosures produced by Sri.K.Prasanna Kumar (1sheet) Ex.P5(p) Letter dt.06.10.2009 of G.M. RO Chennai seeking some documents/ Informations from United Bank of India, Bengaluru Branch. Ex.P5(q) Letter dt 11.01.2009 of AGM, UBI, Bengaluru to GM RO seeking some clarifications and guidance (1 sheet) Ex.P6 Original office note No.290 dt.11/24.12.2012 containing internal investigation report.
Ex.P6(a) Signature of PW.2 131 Spl.CC.No.37/2015 Ex.P6(b) Signature of B.Krishna Mohan Ex.P7 Original Office Note No.127 dt.25.06.2013 containing internal investigation report. Ex.P7(a) Signature of PW.2 Ex.P7(b) Signature of B.Krishna Mohan Ex.P8 Receipt Memo dt.5.3.2014 Ex.P8(a) Signature of VVV.Sathyanarayana Ex.P9 Receipt Memo dt.7.5.2014 (1 sheet) Ex.P9(a) Signature of VVV.Sathyanarayana Ex.P10 Letter dt.7.5.2014 of DGM and CRM, UBI to PI, CBI/ACB, blr (8 sheets) Ex.P11 Original term loan agreement dt.30.12.2009 between UBI and M/s. Binary Spectrum Softech Pvt. Ltd., Ex.P12 Original Demand Promissory Note dt.30.12.2009 for 14 crore (1sheet) Ex.P13 Original registered memorandum of deposit of title deeds dt 30.12.2009 (6 sheets) Ex.P14 Original Letter of guarantee dt. 30122009 executed by A.3 (9 sheets.) Ex.P15 Original Hypothecation Agreement dt.30.12.2009 executed by A.2 (14 sheets) Ex.P16 Original letter of Lein dt.30.09.2009 executed by A.2 (4 sheets) Ex.P17 Original Demand Promissory Note dt.30.12.2009 for 2 crore (1 sheet) executed by A.2.
Ex.P18 Original Letter of continuity dt.30.12.2009 executed by A.2 (1 sheet) Ex.P19 Letter dt 22.02.2010 of M/s. Binary Spectrum Softech Pvt. Ltd., to the Manager, UBI with copy of Lease Agreement.
Ex.P20 Extracts from the minutes of the Board Meeting dt.22.03.2010 (1) sheet.
132 Spl.CC.No.37/2015Ex.P21 Original Memorandum of Deposit of title deeds dt.26.03.2010 (5 sheets) Ex.P22 Letter dt 2.4.2013 of C.Vinay Swamy Advocate, to UBI, Bengaluru Branch on behalf of M/s. Binary Spectrum Softech Pvt. Ltd., with copies of appeal memo in S.A. 209/2013 (23 sheets) Ex.P23 Credit Disbursement monitoring sheet of UBI dt. 8.1.2010 (2 sheets) Ex.P24 Letter dt 06.01.2010 of M/s. Binary Spectrum Softech Pvt. Ltd., to AGM, UBI, Blr Branch along with invoice with enclosures (8 sheets) Ex.P25 One file containing letter dt.6.6.2014 of UBI, Bengaluru branch to CBI with system generated vouchers (14 original FDS etc., 66 sheets) Ex.P25(a) 7 FDs in the name of Equastial Properties Ex.P25(b) 7 Fds in the name of A.3.
Ex.P26 Letter dt.28.07.2014 of AGM, UBI, Bengaluru to the CBI (2 sheets) Ex.P26(a) Signature of PW.4 Ex.P27 Swift copy of Foreign Remittance of USD (5 sheets) Ex.P28 System generated sales and purchase report of UBI, Bengaluru Branch (5 sheets) Ex.P29 End use certificate dt.04.02.2010 issued by K.Gopalakrishna & Co. Chartered Accountants Bengaluru (1 sheet) Ex.P30 Letter dt.26.07.2014 from AGM (Legal) H.O. UBI, to Br.Manager, UBI, Bengaluru Branch (1 sheet) Ex.P31 Letter dt.09.05.2014 of AGM, UBI (Vigilance Department) H.O. to CBI along with original complete process Note of review-cum-
restructuring note in respect of A.2 (35 133 Spl.CC.No.37/2015 sheets) Ex.P32 Letter dt.12.07.2014 of AGM, UBI, Bengaluru Branch to CBI including with copy of list of valuers (15 sheets) Ex.P33 Letter dt. 02.06.2014 of DGM & CRM, United Bank of India, R.O. Bengaluru to CBI (1 sheet) Ex.P34 Letter dt.20.01.2012 of A.2 to AGM, United Bank of India, Bengaluru Branch for additional moratorium period (2 sheets) Ex.P35 Letter dt. 30.03.2012 of United Bank of India, Bengaluru Branch to A.2 (1 sheet) Ex.P36 Approved terms of sanction under rehabilitation package (4 sheets) Ex.P37 Letter dt.21.07.2014 of AGM, United Bank of India (Vigilance) H.O. Bengaluru to CBI (1 sheet) Ex.P38 Letter dt.06.08.2014 of AGM, United Bank of India, Bengaluru to the IO (1 sheet) Ex.P39 Valuation report submitted by L.S.Narayanan & Associates dated 28.07.2014.
Ex.P39(a) Signature of PW.21.
Ex.P40 Valuation Report of L.S.Narayanan & Associates dt.28.07.2014.
Ex.P40(a) Signature of PW.21.
Ex.P41 Receipt Memo dt.28.01.2014 (2 sheets) Ex.P42 Letter dt.25.03.2010 of M/s. Binary Spectrum Softech Pvt. Ltd., to the Branch Manager United Bank of India, Bengaluru Branch regarding replacement (1 sheet)of Ex.P43 Letter dt.29.12.2009 of Chief Manager United Bank of India, Bengaluru Branch to A.2. (1 sheet) Ex.P44 Valuation Report dt.17.12.2009 by M/s.
S.S.Industrial Consultants in respect of 134 Spl.CC.No.37/2015 Sy.No.110, Doddathoguru Village.
Ex.P44(a) Signature of PW.15
Ex.P45 Valuation Report dt.21.12.2009 of M.Sree
Krishna in respect of Sy.No.110,
Doddathoguru Village.
Ex.P45(a) Signature of PW.36
Ex.P46 Valuation Report of S&V Engineering
Enterprises dt.14.07.2012 in respect of Sy.No.110, Doddathoguru Village (2 sheets) Ex.P46(a) Signature of PW.7 Ex.P47 Valuation Report dt.12.03.2010 of S.S.Industrial Consultants in respect of Sy.No.95 of Anjanapura Village.
Ex.P47(a) Signature of PW.15.
Ex.P48 Valuation Report dt.08.03.2010 Ex.P48(a) Signature of PW.36 Ex.P49 Valuation Report dt.14.7.2012 of S &V Engineering Enterprises in respect of Sy.No.95 of Anjanapura Village.
Ex.P49(a) Signature of PW.6.
Ex.P50 Letter dt.05.09.2009 from AGM, Bengaluru Branch, United Bank of India to the G.M. SRO, Chennai.
Ex.P51 Letter dt.23.10.2009 from G.M. SRO, Chennai to AGM, United Bank of India Bengaluru Branch regarding sanction of proposal with enclosures (26 sheets) Ex.P52 Letter dt.2.9.2014 of AGM, United Bank of India blr Branch to the CBI.
Ex.P52(a) Signature of PW.4.
Ex.P53 Certificate under Bankers' Books of Evidence and the Information Technology Act, 2000 Ex.P53(a) Signature of PW.4 Ex.P54 Business Information Report given by Dun & 135 Spl.CC.No.37/2015 Bradstreet India in respect of overseas vendor and letter dt.12.08.2014 (2 sheets) Ex.P55 Covering letter dt.10.02.2014 of PW.6 to CBI. Ex.P55(a) Signature of PW.6 Ex.P56 C/c of the registered Sale Deed dated 04.12.2009 executed by Kinfotech Pvt. Ltd., in favour of M/s. Binary Spectrum Softech Pvt. Ltd., Ex.P57 C/c. of the Memorandum of deposit of title deeds dt.30.12.2009.
Ex.P58 C/c. of the EC.
Ex.P59 Covering letter dt.06.12.2014 of SRO,
J.P.Nagar.
Ex.P59(a) Signature of PW.9
Ex.P60 C/c. of registered sale deed dt.24.03.2010
executed by Jaimuni Rao in favour of M/s. Binary Spectrum Softech Pvt. Ltd.,.
Ex.P61 C/c. of E.C. for the period 01.04.2004 to 5.2.2014.
Ex.P62 Copy of the Gazette Notification dt.17.04.2007 reg. Guidance value.
Ex.P63 Copy of the Gazette Notification dt.29.09.2011 reg. guidance value.
Ex.P64 Copy of Gazette Notification dt.08.08.2013 regarding guidance value.
Ex.P65 Copy of the GPA dt.16.05.2008 in favour of N.Shivaprasad (6 sheets) Ex.P66 Copy of the Legal opinion dt.25.03.2010 of Sri.Mohd. Ibrahim Panel Advocate in respect of properties Sy.No.95, Anjanapura Village, Uttarahally, Hobli, Bengaluru South Taluk (6 sheets) Ex.P67 Original registered Sale Deed dated 04.12.2009 executed by M/s. Kinfotech Pvt. Ltd., in favour of M/s. Binary Spectrum 136 Spl.CC.No.37/2015 Softech Pvt. Ltd., (8 sheets) Ex.P67(a) Signature of PW.12 Ex.P67(b) Signature of PW.16 Ex.P68 Letter dt.23.07.2014 of K.Gopalakrishnan, CA to the CBI regarding forwardal of documents Ex.P68(a) Signature of PW.14.
Ex.P69 Attested copy of the End Use Certificate dated 04.02.2010 issued by PW.14 with enclosures (66 sheets) Ex.P70 to 76 Form No.D.2 addressed to the Manager, United Bank of India dt.7.1.2010 signed by PW.17 (7sheets) Ex.P70(a) to Signature of PW.17 76(a) Ex.P77 to 83 Form No.D2 addressed to the Manager, United Bank of India dt.7.1.2010 signed by A.3 (7 sheets) Ex.P77(a) to Signature of A.3 83(a) Ex.P84 C/c of the Resolution dt.4.1.2010 of the Board Meeting of Directors of M/s. Equastone Properties (1 sheet) Ex.P85 Original Absolute Sale Deed dt.24.03.2010 executed by PW.18 in favour of A.2 (7 sheets) Ex.P85(a) Signature of PW.18 Ex.P86 C/c of the Sale Deed dt.21.11.2008 executged in favour of PW.18 (7 sheets) Ex.P87 Letter dt.31.07.2014 of the Asst. Regn of companies to CBI (1 sheet) Ex.P88 C/c of Certificate of Incorporation in respect of A.2.
Ex.P89 C/c of Form No.32 in respect of A.2. Ex.P90 C/c of Form No.203 of A.2 (37 sheets) 137 Spl.CC.No.37/2015 Ex.P91 C/c of Form No.23 A, C in respect of A.2 33 sheets.
Ex.P92 Letter dt. 30.06.2014 of PW.22.
Ex.P92(a) Signature of PW.22
Ex.P93 Enclosure to Ex.P.91.
Ex.P94 Letter dt.7.8.2014 of SRO, Chennai.
Ex.P94(a) Signature of PW.23
Ex.P95 C/c of documents produced along with
Ex.P.94.
Ex.P95(a) Relevant Entry in EC
Ex.P95(b) C/c of Sale Deed dt.16.05.2005 executed in favour of B.M.Srinivasa Reddy.
Ex.P95(c) C/c of Sale Deed dt.2.12.2009 executed in favour of M/s. Kinfotech Pvt. Ltd., Ex.P95(d) C/c of E.C. regarding mortgage in favour of United Bank of India.
Ex.P96 Letter dt.13.12.2013 of CBI to the Court. Ex.P97 FIR dt.13.12.2013 in R.C.No.17(A)/2013 Ex.P97(a) Signature of SP.
Ex.P98 Letter dt.11.08.2014 of A.3 to CBI (3 sheets) Ex.P99 Copy of share purchase agreement dt.21.03.2011 (10 sheets) Ex.P100 Copy of share purchase agreement dt.1.2.2012 (10 sheets) Ex.P101 Share Certificates Optech Consultancy Inc. Ex.P102 3 transfer form, which comes along with the share certificate.
Ex.P103 Letter dtd.14.08.2014 to CBI (2 sheets) Ex.P104 Share Purchase Agreement dt.11.12.2009 Ex.P105 Share Certificates and the transform forms Ex.P106 Letter from A.3 to CBI along with Board Resolution authority Mr. Gururaj.
138 Spl.CC.No.37/2015Ex.P107 Covering letter dt.17.07.2014 of Sr. Sub-
Registrar, Kengeri to CBI.
Ex.P107(a) Signature of PW.26 Ex.P108 2 ECs in respect of Sy.No.95 Anjanapura Village (4 sheets) Ex.P109 C/c of the registered Sale Deed dt.16.12.2006 executed in favour of P.Gurunath Reddy (9 sheets) Ex.P110 C/c of the registered Sale Deed dt.28.02.2005 executed in favour of K.V.Surendra.
Ex.P111 C/c of the registered Sale Deed dt.31.12.2003 in favour of G.Srinivas Ex.P112 C/c of the Sale Deed dt.17.09.1996, document of 5549/960-97 Ex.P113 Copy of the memo dt.13.08.2009 of District Registrar to SRO, Kengeri.
Ex.P114 Copy of Letter dt.6.3.2009 of SRO, Kengeri to District Registrar, Bengaluru with Annexure Ex.P115 Original 164 Cr.P.C., statement of PW.27 recorded in RC 16(A)/13 (Spl.CC 38/2015) Ex.P115(a) Signature of PW.27 Ex.P116 Portion of 161 statement of PW.28 Ex.P117 Original 164 statement of PW.28 recorded in RC No.16(A)/13 (Spl.CC.38/15) Ex.P117(a) Signature of PW.28 Ex.P118 Original 164 Cr.P.C. statement of PW.29 recorded in RC No.16(A)/2013 (Spl.CC.38/15) Ex.P118(a-c) Signature of PW.29 Ex.P119,120 Relevant portion of 161 Cr.P.C., statement of PW.29.
Ex.P121 One file captioned as M/s. Binary Spectrum Softech Pvt. Ltd., Ex.P122 Original account of Form in respect of Baba Sathyanarayana Trading Company along with 139 Spl.CC.No.37/2015 copies of KYC documents (10 sheets) Ex.P123 Statement of A/c in respect of current A/c of Baba Sathyanarayana Trading Company for the period 10.07.2009 to 09.10.2009 along with 2 certificates U/Sec. 2A of BBE Act and U/Sec. 65B of IE Act.
Ex.P124 Original production cum seizure memo dated
23.12.2004 (11 sheets)
Ex.P124(a) Signature of PW.39
Ex.P124(b) Signature of PW.40
Ex.P125 Relevant portion of 161 statement of PW.41.
Ex.P126 Seizure Search Memo
Ex.P126(a) Signature of PW.42
Ex.P127 U/Sec. 165(i) Cr.P.C.,
Ex.P127(a) Signature of PW.42
Ex.P128 Search List and Inventory List.
Ex.P129 Receipt Memo dated 28.08.2014
Ex.P129(a) Signature of PW.42
Ex.P130 Receipt Memo dated 09.07.2014
Ex.P130(a) Signature of PW.42
Ex.P131 10 cheques
Ex.P132 Copy of MOU
Ex.P133 & Copies of two shareholders agreement
134
Ex.P135 Downloaded 32 sheets of screen shots.
LIST OF EXHIBITS MARKED ON BEHALF OF DEFENSE:
Exhibit Number Description Ex.D1 Office Note dated 5.2.2010 of United Bank of India CPPMI Dept. HO. Kolkata.140 Spl.CC.No.37/2015
Ex.D1(a) Endorsement on Ex.D1 Ex.D2 Proposal dated 22.3.2010 of United Bank of India No.CPPMI/ADV/DP/333/10 Ex.D2(a) Endorsement dt.22.03.2010 on Ex.D2 Ex.D3 D.P. Statement dated 26.03.2010 submitted to the Executive Director of United Bank of India Ex.D3(a) Endorsement dt.27.03.2010 on Ex.D.3 Ex.D4 Copy of Bridge Loan Repaid Statement (2 sheets) Ex.D5 Copy of the Sanction Letter dt.3.8.2006 with its enclosures Ex.D6 Copy of housing loan repaid statement(8 sheets) Ex.D7 Copy of order sheet RC 15(A)/2013 with Final report (1 sheet) Ex.D8 Copy of Final Report in RC 14(A)/2013 (22 sheets) Ex.D9 Copy of Final Report U/Sec. 173(8) in RC 14(A)/2013 (5 sheets) [Manjunath Sangreshi] XXI Addl.City Civil and Sessions Judge & Prl.Special Judge for CBI Cases Bengaluru [CCH-4].
*** MANJUNATH SANGRESHI Digitally signed by MANJUNATH SANGRESHI Date: 2025.12.24 12:59:32 +0530