Karnataka High Court
V Rama Rao vs The Deputy Superintendent Of Police on 16 April, 2014
Author: N.Ananda
Bench: N.Ananda
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 16TH DAY OF APRIL 2014
BEFORE
THE HON'BLE MR.JUSTICE N.ANANDA
CRIMINAL REVISION PETITION No.925/2007 C/W
CRIMINAL REVISION PETITION Nos.984/2007, 840/2007,
1100/2007 & 801/2007
CRL.RP.No.925/2007
BETWEEN:
V RAMA RAO
321, VYAPAR BHAVAN
49, P.D. MELLO ROAD
CARNAC BUNDER
MASJID (E)
MUMBAI - 400 009. ... PETITIONER
(BY SRI KIRAN S JAVALI, SENIOR ADVOCATE)
AND:
THE DEPUTY SUPERINTENDENT OF POLICE
CBI , BS & FC
BANGALORE. ... RESPONDENT
(BY SRI C H JADHAV, SENIOR ADVOCATE)
THIS REVISION PETITION IS FILED UNDER SECTION 397
R/W 401 CR.P.C., PRAYING TO SET ASIDE THE ORDER DATED
26.05.2007 AND DISCHARGE THE ACCUSED NO.10, IN SPL.CC
NO.183/2000 ON THE FILE OF THE XXI ADDL. CITY CIVIL AND
S.J. AND SPL. JUDGE FOR CBI CASES BANGALORE.
2
CRL.RP.No.984/2007
BETWEEN:
YASHPAL KUMAR
AGED ABOUT 45 YEARS
NO.94 ARCADIA
NARIMAN POINT
MUMBAI - 21. ... PETITIONER
(BY SRI SANTOSH S NAGARALE, ADV.)
AND:
STATE BY DELHI POLICE ESTABLISHMENT
CENTRAL BUREAU OF INVESTIGATION
BANK SECURITIES AND FRAUD CELL
GANGANAGAR BELLARY ROAD
BANGALORE - 32. ... RESPONDENT
(BY SRI C H JADHAV, SENIOR ADVOCATE)
THIS REVISION PETITION IS FILED UNDER SECTIONS
397 & 401 CR.P.C., PRAYING TO SET ASIDE THE ORDER DATED
26.05.2007, PASSED IN C.C.(SPECIAL CASE) NO.183/2000 BY
THE HON'BLE COURT OF XXI ADDL. CITY CIVIL AND S.J AND
SPL.JUDGE FOR C.B.I CASES, BANGALORE & ETC.
CRL.RP.No.840/2007
BETWEEN:
K SHIVARAMA SHETTY
S/O K BABU SHETTY
AGED ABOUT 75 YEARS
R/AT NO.1154, HAL II STAGE
INDIRANAGAR
BANGALORE - 38. ... PETITIONER
(BY SRI P S RAJAGOPAL, SENIOR ADVOCATE)
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AND:
STATE BY DELHI POLICE ESTABLISHMENT
(CENTRAL BUREAU OF INVESTIGATIONS)
BANK SECURITIES AND FRAUD CELL
GANGANAGAR, BELLARY ROAD
BANGALORE - 560032. ... RESPONDENT
(BY SRI C H JADHAV, SENIOR ADVOCATE)
THIS REVISION PETITION IS FILED UNDER SECTIONS
397 AND 401 CR.P.C., PRAYING TO SET ASIDE THE ORDER
DATED 26.05.2007 IN SPL.C.C.NO.183/2000, PASSED BY THE
XXI ADDL. CITY CIVIL AND S.J. AND SPL.JUDGE FOR CBI
CASES, BANGALORE & ETC.
CRL.RP.No.1100/2007
BETWEEN:
MR. K SADANANDA SHETTY
SAHASRASHREE, NO 16, I BLOCK
3 LANE, 2 STAGE, RMV EXTENSION
BANGALORE - 34. ... PETITIONER
(BY SRI P V GUNJAL, ADV.)
AND:
SUPERINTENDENT OF POLICE
CENTRAL BUREAU OF INVESTIGATION
BANKING SECURITIES AND FRAUDS CELL
BELLARY ROAD, BANGALORE - 94. ... RESPONDENT
(BY SRI C H JADHAV, SENIOR ADVOCATE)
THIS REVISION PETITION IS FILED UNDER SECTION 397
R/W SEC. 401 CR.P.C., PRAYING TO SET ASIDE THE ORDER
DATED 26.05.2007 PASSED BY THE XXI ADDL. CITY CIVIL AND
SESSIONS JUDGE, AND SPECIAL JUDGE FOR CBI CASES,
BANGALORE IN SPL.C.C.NO.183/2000 & ETC.
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CRL.RP.No. 801/2007
BETWEEN:
1. R S NARAYANAN
S/O K M NARAYANAN NAIR, 62 YEARS
R/AT NO.117, 'D' BLOCK
NEELADRI MAHAL
NANDIDURGA ROAD
BANGALORE - 560 071
2. A B S SHETTY
S/O SHESHASHETTY, 63 YEARS
R/AT NO.2589, 18TH MAIN
II CROSS, HAL STAGE
BANGALORE
3. RAMESH A SHETTY
S/O ACHHANNASHETTY, 60 YEARS
R/AT FLAT NO.302
'LAKE PALAZZOR' NO.1,
ST.JOHN'S ROAD, BANGALORE-72. ... PETITIONERS
(BY SRI P S RAJAGOPAL, SENIOR ADVOCATE)
AND:
STATE BY DELHI POLICE ESTABLISHMENT
(CENTRAL BUREAU OF INVESTIGATIONS)
BANK SECURITIES AND FRAUD CELL
GANGANAGAR,BELLARY ROAD
BANGALORE - 560 032. ... RESPONDENT
(BY SRI C H JADHAV, SENIOR ADVOCATE)
THIS REVISION PETITION IS FILED UNDER SECTIONS
397 AND 401 CR.P.C., PRAYING TO SET ASIDE THE ORDER
DATED 26.05.2007 IN SPL.C.C.NO.183/2000 PASSED BY THE
XXI ADDL. CITY CIVIL AND S.J. AND SPL. JUDGE FOR CBI
CASES, BANGALORE & ETC.
THESE REVISION PETITIONS COMING ON FOR
ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
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ORDER
The petitioners in the afroestated revision petitions have been arrayed as accused no.1, 2, 4 to 6, 9 and 10. Accused no.7-B.J.Vora is dead. Accused no.3-J.S.Kajekar has not challenged the impugned order. Accused no.8 has filed a revision petition challenging the impugned order with an application for condonation of delay of 6 years and 4 months and the same was dismissed by this court.
2. The case before the trial court is a warrant case instituted upon a police report alleging offences punishable under Sections 120-B and 420 IPC, Section 5 (2) r/w 5 (1) (d) of the Prevention of Corruption Act, 1947 and also under Section 13 (1) (d) of the Prevention of Corruption Act, 1988.
3. Before the trial court, the petitioners herein had filed applications under Section 239 Cr.P.C., and sought for discharge. The learned Special Judge on consideration of the final report and documents filed along with the final report has held that there is prima-facie against petitioners 6 to frame charge, thus rejected the applications for discharge and framed charge against the accused for offences punishable under Sections 409, 420, 120-B IPC and also for an offence punishable under Sections 13 (1) (d) r/w 13 (2) of the Prevention of Corruption Act, 1988 and Section 5 (1) (d) of the Prevention of Corruption Act, 1947.
4. I have heard Sri.P.S.Rajagopal, learned senior counsel for petitioners (accused no.2, 4 to 6), Sri.Santosh Nagarale, learned counsel for accused no.9 and Sri.Kiran S.Javali, learned counsel for accused no.10.
As already stated, the case before the trial court is a warrant case instituted upon the police report.
5. In a decision reported in 1986 Crl.LJ 1922 (in the case of R.S.Nayak -vs- A.R.Antulay and another) the Supreme Court dealing with the provisions of Sections 227, 239 and 245 Cr.P.C., has held:
"44. The Cr.P.C., contemplates discharge of the accused by the Court of Session under S.227 in case triable by it; cases instituted upon a police 7 report are covered by S.239 and cases instituted otherwise than on police report are dealt with in S.245. The three sections contain somewhat different provisions in regard to discharge of the accused. Under S.227, the trial Judge is required to discharge the accused if he 'considers that there is not sufficient ground for proceeding against the accused'. obligation to discharge the accused under S.239 arises when "the Magistrate considers the charge against the accused to be groundless." The power to discharge is exercisable under S.245(1) when "the Magistrate considers, for reasons to be recorded, that no case against the accused has been made out which, it unrebutted, would warrant his conviction....." It is a fact that Ss.227 and 239 provide for discharge being ordered before the recording of evidence and the consideration as to whether charge has to be framed or not is required to be made on the basis of the record of the case, including documents and oral hearing of the accused and the prosecution or the police report, the documents sent along with it and examination of the accused and after affording an opportunity to the two parties to be heard. The stage for discharge under S.245, on the other hand, is reached only after the evidence referred to in S.244 has been taken. Notwithstanding this difference in the position there is no scope for doubt that the stage at which the Magistrate is required to consider the question of framing of charge under S.245(1) is a preliminary one and the test of "prima facie" case has to be applied. In spite of the difference in the language of the three sections, the legal position is that if the trial Court is satisfied that a prima facie case is made out, charge has to be framed."8
6. The learned Special Judge on consideration of the final report and documents filed along with the final report has held that there is prima-facie case against petitioners for the aforestated offences. The petitioners have invoked the revisional jurisdiction of this court under Section 401 Cr.P.C.
7. In a revision petition against the order of framing charges, this court will have to examine if the court below has committed any illegality resulting manifest injustice to the accused, whether court below has recorded findings without therebeing any supporting material.
8. This court while exercising revisional jurisdiction against the order of framing charges, does not sit as a court of appeal to examine the factual controversy or the matters which the prosecution has to prove during trial.
9. As per the final report and documents filed along with the final report, at the relevant time, accused no.1- K.Sadananda Shetty was the Chairman and Managing 9 Director of Vijaya Bank; accused no.2-K.Shivarama Shetty succeeded accused no.1; accused no.4-R.S.Narayanan was working as Chief Manager of Vijaya Bank, Excelsior Branch Mumbai; accused no.5-A.B.S.Shetty was working as Assistant General Manager and accused no.6-Ramesh A. Shetty was working as Chief Manager of Vijaya Bank Excelsior Branch, Mumbai; accused no.9-Yashpal Kumar and accused no.10-V.Rama Rao were the Directors of M/s.P.J.Pipes & Vessels Limited, Mumbai of which accused no.7 (since dead) and accused no.8 are the Directors (accused no.8 is not a petitioner herein).
10. M/s.P.J.Pipes & Vessels Limited, Mumbai was incorporated on 06.10.1982 and proposed to set up a plant for threading, welding, bucking unit at Taloja, Mumbai for import of pipes and after threading, welding etc., supplying the pipes to M/s.ONGC, Oil India Limited etc., as per their requirements for their oil exploration programmes and the total cost of the project was Rs.160 Lakhs which included Term Loan of Rs.90 Lakhs and working capital limit of 10 Rs.50 Lakhs and the balance of Rs.20 Lakhs as unsecured loans. The supply made by M/s.P.J.Pipes & Vessels Limited to M/s.ONGC, Oil India Limited for their oil exploration programmes was treated as deemed export from JCCI & E.
11. As per the final report, accused no.1-K.Sadananda Shetty, accused no.2-K.Shivarama Shetty, accused no.3- J.S.Kajekar (not a petitioner herein), accused no.4- R.S.Narayanan, accused no.5-A.B.S.Shetty, accused no.6- Ramesh A.Shetty, accused no.7-B.J.Vora (since dead) and accused no.8-Smt.Geetha Vora (not before this court), accused no.9-Yashpal Kumar and accused no.10-V.Rama Rao had entered into criminal conspiracy hatched at Mumbai and Bangalore during the period between 1987 and 1992 and in furtherance of such criminal conspiracy, they made dishonest, fraudulent representation to Vijaya Bank, Excelsior Branch, Mumbai in the matter of availing of Foreign Letters of Credit, Inland Letters of Credit, Bank Guarantee facilities, Overdraft facilities and Term Loan facilities. As a result of such misrepresentation and active 11 connivance of accused no.1 to 6 Vijaya Bank, Excelsior Branch, Mumbai had extended several loan facilities to M/s.P.J.Pipes & Vessels Limited of which accused no.7 to 10 were the Directors. Accused no.1-K.Sadananda Shetty, accused no.2-K.Shivarama Shetty, accused no.3-J.S.Kajekar (not a petitioner herein), accused no.4-R.S.Narayanan, accused no.5-A.B.S.Shetty and accused no.6-Ramesh A.Shetty by abusing their official position as public servants or by corrupt or illegal means, released the entire loan amounts to M/s.P.J.Pipes & Vessels Limited and obtained pecuniary advantage for themselves or for accused no.7 to 10 and caused wrongful loss in a sum of Rs.29.35 Crores to Vijaya Bank, Excelsior Branch, Mumbai as on 31.03.1993.
12. In furtherance of the aforestated conspiracy, the Directors of M/s.P.J.Pipes & Vessels Limited diverted the funds sanctioned/released by accused no.1 to 6 in a sum of Rs.48.80 Lakhs and Rs.71.16 Lakhs respectively to their sister concerns namely M/s.Boiler Tube Company, M/s.P.Jayantilal and Company Private Limited, Mumbai and 12 also diverted funds to M/s.Arunodaya Exports, Mumbai, M/s.Gaurav Containers Limited, Mumbai, M/s.Golden Fertilizers, Mumbai and M/s.Hindusthan Agro Products Limited, Mumbai to the tune of Rs.90.46 Lakhs, Rs.90 Lakhs and Rs.17.50 Lakhs and Rs.30 Lakhs respectively.
13. At the first instance, one of the Directors of the company namely accused no.9-Yashpal Kumar had brought a letter dated 13.04.1987 from Maharashtra State Financial Corporation, Mumbai to the General Manager, Vijaya Bank, Bangalore requesting Term loan of Rs.35 Lakhs from Vijaya Bank since Maharashtra State Financial Corporation was considering to sanction the Term Loan of Rs.55 Lakhs and requested Vijaya Bank to indicate whether Vijaya Bank would consider sanction of Term loan of Rs.35 Lakhs for the project. Accused no.1 being the Chairman and Managing Director given his approval on 30.04.1987 and sanctioned term loan of Rs.15 Lakhs and also need based working capital to M/s.P.J.Pipes & Vessels Limited, on the basis of the said letter of Maharashtra State Financial Corporation 13 without even a request letter or application from M/s.P.J.Pipes & Vessels Limited to Vijaya Bank. In this behalf, first accused and others had sent a reply to Maharashtra State Financial Corporation on 06.05.1987 stating that Vijaya Bank was agreeable in principle to extend the Term loan not exceeding Rs.35 Lakhs and also need based working capital facilities.
14. At this juncture, it is relevant to state that first accused and other accused (accused no.2 to 4) had entered into conspiracy to sanction term loan to M/s.P.J.Pipes & Vessels Limited without therebeing an application, without ascertaining the credibility and constitution of the company and its functions, depending upon the letter dated 30.04.1987 said to have been given by Maharashtra State Financial Corporation, Mumbai.
15. Sri.P.S.Rajagopal, learned senior counsel for accused would submit that, though the application was not there, the letter issued by Maharashtra State Financial 14 Corporation, Mumbai on 30.04.1987 was sufficient for accused no.1 to sanction bridge loan of Rs.15 Lakhs.
The learned counsel would further submit that sanction of Rs.15 Lakhs was subsequently ratified by the Board of Directors of Vijaya Bank, therefore, no criminality can be attracted to accused no.1 to 4 in relation to sanction of bridge loan of Rs.15 Lakhs.
16. The learned counsel for CBI would submit that Vijaya Bank had not framed any rules and regulations to abide or go by the advise given by the Maharashtra State Financial Corporation, which is a State owned Corporation. In the circumstances, it can safely be held that there is prima-facie case against petitioners that they had entered into conspiracy to sanction Term Loan of Rs.15 Lakhs to M/s.P.J.Pipes & Vessels Limited represented by its Directors without obtaining necessary security to safeguard the interest of bank.
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17. The investigation records would reveal that in pursuance of said conspiracy, accused no.3 to 6 had obtained the oral permission of accused no.2 which was later approved by accused no.1.
The investigation records would reveal that in pursuance of said conspiracy, accused no.1 had sanctioned to M/s.P.J.Pipes & Vessels Limited bank guarantee for a sum of Rs.13.53 Lakhs without waiting for the approval of Board of Directors of Vijaya Bank when the regular proposal of M/s.P.J.Pipes & Vessels Limited was pending with Vijaya Bank. In fact, the Board of Directors have expressed their displeasure for payment by accused no.1 to which accused no.2 to 4 have consented.
18. The investigation records would reveal that in pursuance of conspiracy, accused no.1 to 6 had violated the terms of sanction of facilities to M/s.P.J.Pipes & Vessels Limited stipulated by the Board of Directors of Vijaya Bank and had not obtained the General Power of Attorney on 16 behalf of M/s.P.J.Pipes & Vessels Limited in getting the payment directly from ONGC/Oil India Limited to which M/s.P.J.Pipes & Vessels Limited was supplying pipes. On the other hand, M/s.P.J.Pipes & Vessels Limited represented by afrorestated Directors had directly received payments from ONGC and they had diverted the funds. In that way, accused no.1 to 4 in connivance with accused no.5 to 10 diverted the funds putting Vijaya Bank funds in jeopardy.
The investigation records would reveal that in pursuance of conspiracy entered into between aforestated Directors of M/s.P.J.Pipes & Vessels Limited, accused no.7 to 10 had obtained 144 Import Letters of Credit from 1987 to 1992 from Vijaya Bank, Excelsior Branch in connivance with accused no.1 to 6. Accused no.1 to 6 by abusing their official position as public servants, sanctioned/released further import Letters of Credit to M/s.P.J.Pipes & Vessels Limited and the outstanding in respect of Import Letters of Credit was not subsequently 17 adjusted to the tune of 4,644.82 Lakhs. The acts committed by accused no.1 to 6 was in the interest of public but it was also in violation of existing bank norms. Accused no.1 to 6 have misused their official position for monitory gain and showed undue favour to accused no.7 to 10 by sanction of aforestated Letters of Credit without obtaining any security to recover the same from M/s.P.J.Pipes & Vessels Limited thus, caused corresponding loss to Vijaya Bank.
19. The investigation records would reveal that, in furtherance of conspiracy entered into between accused no.1 to 10, accused no.3 and 4 used to get spot sanctions during the visit of accused no.1 to Mumbai in favour of M/s.P.J.Pipes & Vessels Limited and some of the sanctions like enhancement of Import Letters of Credit facility from Rs.600 Lakhs to Rs.900 Lakhs and Bank Guarantee facility limit from Rs.250 Lakhs to Rs.301.46 Lakhs. This was not even reported to the Board of Directors for ratification. The conspiracy hatched by accused no.1 to 10 to get spot 18 sanction for the aforestated loans would prima-facie establish the offences against the accused.
20. The investigation records would reveal that, there was request for release/renewal of Bank Guarantee of Rs.1,01,91,500/- in favour of sister concern of M/s.P.J.Pipes & Vessels Limited namely M/s.Boiler Tube Company from the funds sanctioned to M/s.P.J.Pipes & Vessels Limited by the Board on 10.02.1990 and the matter was not even informed to Board of Directors of Vijaya Bank for quite a long time. Ultimately, the matter was placed in the meeting held by the Board of Directors on 12.08.1992 after the retirement of accused no.2-K.Shivarama Shetty and the Board has expressed its displeasure.
21. The investigation records would reveal, in furtherance of conspiracy entered into between accused no.1 to 6, accused no.2, 3 and 5 by abusing their official positions as public servants had sanctioned/released Inland Letters of 19 Credit facilities of Rs.8.25 Crores to M/s.P.J.Pipes & Vessels Limited on 20.03.1992 for the payment of customs duty in the name of a financial intermediary, M/s.Lodestar Investments Private Limited of which Yashpal Kumar (accused no.9) was a director. Accused no.9 was also one of the Directors of M/s.P.J.Pipes & Vessels Limited. Mr.Yashpal Kumar (accused no.9) had concealed from the Board of Directors of Vijaya Bank that he was the Director of M/s.Lodestar Investments Private Limited, which resulted in wrongful loss of Rs.6.60 Crores to Vijaya Bank. If the amount was required to be paid by M/s.P.J.Pipes & Vessels Limited as customs duty, there was no need to involve M/s.Lodestar Investments Private Limited as a conduit.
22. The investigation records would reveal that, in furtherance of conspiracy, accused no.2-Shivarama Shetty by abusing his official position as a public servant, on the day of his retirement on 30.06.1992, had sanctioned to M/s.P.J.Pipes & Vessels Limited Import Letters of Credit of 20 Rs.651.83 Lakhs and Over Draft facility of Rs.164 Lakhs by holding a meeting of the General Managers and Deputy General Managers of Vijaya Bank in his chamber, violating the terms of sanction of the Board of Directors of Vijaya Bank on 27.06.1992. The undue haste shown by accused no.2 in connivance with accused no.3 and 4 in sanctioning Import Letters of Credit of Rs.651.83 Lakhs and Over Draft facility of Rs.164 Lakhs to M/s.P.J.Pipes & Vessels Limited, of which accused no.7 to 10 were the Directors would manifest criminal intention of accused no.1 to 4. There was no urgency for accused no.2 to sanction the aforestated loans to M/s.P.J.Pipes & Vessels Limited on 30.06.1992 on which date he retired from service. When the matter was put up before the Board of Directors, they have recorded/expressed their displeasure about the manner in which the loan was sanctioned by accused no.1 to 4 in favour of M/s.P.J.Pipes & Vessels Limited. 21
23. The investigation records would reveal that, Indian Bank, Fort Branch, Mumbai had joined the consortium with Vijaya Bank, Excelsior Branch, Mumbai in financing M/s.P.J.Pipes & Vessels Limited, as per the discussion in the consortium meeting held on 04.02.1989, at the ratio of 60: 40 by Vijaya Bank and Indian Bank. In furtherance of said criminal conspiracy, accused no.7 to 10 in connivance with accused no.1 to 6 had obtained aforesaid credit facilities during the period from 1987 to 30.06.1992 by dishonestly and fraudulently misrepresenting the facts to Vijaya Bank, Excelsior Branch, Mumbai and caused wrongful loss to an extent of Rs.29.35 Crores to Vijaya Bank, Excelsior Branch, Mumbai as on 31.03.1993.
24. The investigation records would reveal that, accused no.7 to 10 had entered into conspiracy and they had dishonestly, fraudulently obtained payments directly from ONGC/JCCI&E and deposited the same in the accounts of M/s.P.J.Pipes & Vessels Limited with Central 22 Bank of India, Juhu Branch, Mumbai and Kapoli Co- operative Bank Limited, Mumbai to the tune of Rs.12.49 Crores and Rs.5.03 Crores respectively and utilized/diverted the funds which should have been repaid to Vijaya Bank.
25. The investigation records would reveal that, accused no.1 to 6 by abusing their official positions as public servants, with dishonest intention and by corrupt and illegal means joined the hands of accused no.7 to 10 and abetted accused no.7 to 10 to divert the funds of M/s.P.J.Pipes & Vessels Limited to the sister concerns of M/s.P.J.Pipes & Vessels Limited namely M/s.Boiler Tube Company, M/s.P.Jaynthilal & Company Private Limited to the tune of Rs.48.80 Lakhs and Rs.71.16 Lakhs respectively. In other words, accused no.1 to 6 were sanctioning the loan amount to M/s.P.J.Pipes & Vessels Limited and accused no.7 to 10 in connivance with accused no.1 to 6 diverted the funds to the sister concerns of M/s.P.J.Pipes & Vessels Limited to cause wrongful loss to Vijaya Bank.
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26. The investigation records would reveal that there was diversion of funds to the sister concerns of M/s.P.J.Pipes & Vessels Limited namely M/s.Arunodaya Exports, M/s.Gaurav Containers Limited, M/s.Hindusthan Agro Chemicals Limited, M/s.Golden Fertilizers Limited to the tune of Rs.90.46 Lakhs, Rs.90 Lakhs, Rs.30 Lakhs and Rs.17.50 Lakhs respectively.
27. The investigation records would reveal that, accused no.1 to 4 by abusing their official position as public servants and in connivance with accused no.7 to 10 allowed accused no.7 to 10 to unauthorisedly sell the imported SS Plates (hypothecated to Vijaya Bank) which were imported under duty free scheme and under the Import Letters of Credit opened by Vijaya Bank, in the open market for Rs.2.07 Crores. The accused had sold the SS Plates in the open market for a sum of Rs.2.07 Crores and utilized the same. As a result of aforesaid unauthorized sale of duty free imported SS plates, the Director of Revenue Intelligence 24 conducted raid on the factory and office of M/s.P.J.Pipes & Vessels Limited on 03.11.1990 and seized the balance quantity of SS plates thus, Vijaya Bank suffered loss due to the criminal acts committed by accused no.1 to 10.
28. The learned trial judge on meticulous consideration of contents of final report and documents filed along with the final report, rejected the application filed by accused for discharge and framed charges against the accused for offences punishable under Sections 409, 420, 120-B IPC, and Section 13 (2) r/w 13 (1) (d) of the Prevention of Corruption Act, 1988 and Section 5 (2) r/w 5 (1) (d) of the Prevention of Corruption Act, 1947.
29. Sri.P.S.Rajagopal, learned senior counsel for accused no.1 to 4 has made following submission:
The aforestated loans sanctioned by accused no.1 and passed by accused no.2 to 5 were subsequently ratified in the meeting of Board of Directors.25
30. The learned senior counsel relying on the judgment of Supreme Court reported in 2006 (5) SCC 96 (in the case of Maharashtra State Mining Corporation -vs- Sunil, S/o Pundikarao Pathak) would submit that, once the acts of accused are ratified, ratification will have retrospective effect. The stigma attached to invalid act gets detatched.
31. Sri.C.H.Jadhav, learned Senior Counsel relying on the judgment reported in (2010) 10 SCC 677 (in the case of Ritesh Tiwari and another -vs- State of UP and another) would submit that administrative law and administrative action cannot validate the acts which would attract penal consequences or acts which are made punishable under law.
The law is fairly well settled, on the administrative side, invalid acts even if they are deemed to have been ratified on the date of action, that can only absolve the civil 26 consequences however, illegal acts which are made punishable either under the Indian Penal Code or Special Enactments cannot be ratified. Therefore, the submission of learned counsel for accused cannot be accepted.
32. The learned counsel for accused would submit that in the Departmental Enquiry held against accused 4, 5 and 6, they have been exonerated by Central Vigilance Commission. Therefore, the charges cannot be framed on same material. The learned counsel for accused has relied on judgment of the Supreme Court reported in (1996) 9 SCC 1 (in the case of P.S.RAJYA vs. STATE OF BIHAR). In the afore stated judgment, it is held that if the charges in departmental proceedings and the charges in criminal proceedings are one and the same, if the accused is exonerated in departmental proceedings, he cannot be tried for the same charges in Criminal Court, because the standard of proof required to establish the guilt in a Departmental Enquiry would stand the test of probabilities, 27 whereas the proof in criminal proceedings shall be beyond reasonable doubt.
33. The learned counsel for Central Bureau of Investigation relying on the judgments reported in (2012) 9 SCC 685 (in the case of STATE (NCT OF DELHI) vs. AJAY KUMAR TYAGI) and also on the decision reported in (2007) 14 SCC 667 (in the case of STATE THROUGH SPE & CBI, ANDHRA PRADESH vs. M.KRISHNA MOHAN AND ANOTHER) would submit that exoneration of accused in departmental proceedings, would not entitle them for discharge in criminal trial.
34. In the case of Ajay Kumar Tyagi, the Supreme Court has held:
"19. Even at the cost of repetition, we hasten to add that none of the heads in P.S.Rajya is in relation to the effect of exoneration in the departmental proceedings on criminal prosecution on identical charge. The decision in P.S.Rajya, therefore, does not lay 28 down any proposition that on exoneration of an employee in the departmental proceedings, the criminal prosecution on the identical charge or the evidence has to be quashed.
20. It is well settled that the decision is an authority for what it actually decides and not what flows from it. The mere fact that in P.S.Rajya, this Court quashed the prosecution when the accused was exonerated in the departmental proceeding would not mean that it was quashed on that ground. This would be evident from para 23 of the judgment, which reads as follows: (SCC p.9) "23. Even though all these facts including the report of the Central Vigilance Commission were brought to the notice of the High Court, unfortunately, the High Court took a view that the issues raised had to be gone into in the final proceedings and the report of the Central Vigilance Commission, exonerating the appellant of the same charge in departmental proceedings would not conclude the criminal case against the appellant. We have already held that for the reasons given, on the peculiar facts of this 29 case, the criminal proceedings initiated against the appellant cannot be pursued. Therefore, we do not agree with the view taken by the High Court as stated above. These are the reasons for our order dated 27.3.1996 for allowing the appeal and quashing the impugned criminal proceedings and giving consequential reliefs."
From the reading of the aforesaid passage of the judgment it is evident that the prosecution was not terminated on the ground of exoneration in the departmental proceeding but, on its peculiar facts.
21. It is worth mentioning that the decision in P.S.Rajya came up for consideration before a two-Judge Bench of this Court earlier, in State v. M.Krishna Mohan. While answering an identical question i.e. whether a person exonerated in the departmental enquiry would be entitled to acquittal in the criminal proceeding on that ground alone, this Court came to the conclusion that exoneration in departmental proceeding ipso facto would not lead to the acquittal of the accused in the 30 criminal trial. This Court observed emphatically that the decision in P.S.Rajya was rendered on peculiar facts obtaining therein. It is apt to reproduce paras 32 and 33 of the said judgment in this connection: (M.Krishna Mohan case, SCC p.676) "32. Mr. Nageswara Rao relied upon a decision of this Court in P.S.Rajya v. State of Bihar. The fact situation obtaining therein was absolutely different. In that case, in the vigilance report, the delinquent officer was shown to be innocent. It was at that juncture, an application for quashing of the proceedings was filed before the High Court under Section 482 of the Code of Criminal Procedure which was allowed relying on State of Haryana v. Bhajan Lal holding: (P.S.Rajya case SCC p.9, para 23)
23. Even though all these facts including the report of the Central Vigilance Commission were brought to the notice of the High Court, unfortunately, the High Court took a view that the issues raised had to be gone into in the final proceedings and the report of the Central Vigilance Commission, 31 exonerating the appellant of the same charge in departmental proceedings would not conclude the criminal case against the appellant. We have already held that for the reasons given, on the peculiar facts of this case, the criminal proceedings initiated against the appellant cannot be pursued." Ultimately this Court concluded as follows:
(M.Krishna Mohan case, SCC p.676, para 33)
33.The said decision was, therefore, rendered on the facts obtaining therein and cannot be said to be an authority for the proposition that exoneration in departmental proceeding ipso facto would lead to a judgment of acquittal in a criminal trial."
35. I have gone through the copies of inquiry report submitted by CVC in respect of accused No.4-
R.S.Narayanan, accused No.5-A.B.S.Shetty and accused No.6-Ramesh A.Shetty. In these preliminary reports, accused 4 to 6 have been exonerated and the report of Inquiring Authority was accepted by Disciplinary Authority. At this juncture, it is relevant to note that first information 32 was registered on 24.12.1996. From the inquiry reports, we find that charges framed therein against accused 4 to 6, are not identical to the charges framed in the instant case. The Inquiring Authority has proceeded on an assumption that sanction of afore stated loans were approved by the Board of Directors in subsequent meetings. Therefore, there was no need to proceed against the accused. The nature of material collected during investigation and nature of material relied upon by Inquiring Authority, are entirely different. The inquiry reports do not reveal that all the witnesses cited in the final report filed in the instant case (who are as many as
120) were examined before Inquiring Authority. In a decision reported in (2009) 10 SCC 674 (in the case of CENTRAL BUREAU OF INVESTIGATION vs. V.K.BHUTIANI), the Supreme Court has held that criminal proceeding cannot be quashed on the ground that accused was in fact exonerated by Central Vigilance Commission report and he was found to be innocent. As already stated, the charges framed against accused 4 to 6 in Departmental Enquiry and charges framed 33 against them in the instant case, are entirely different. The material relied upon by bank before the Inquiring Authority and the material relied upon by CBI in instant case are entirely different. In view of this, the exoneration of accused 4 to 6 in the Departmental Enquiry may save them from consequences which would have otherwise affected their service conditions. However, on the basis of report submitted by Central Vigilance Commission in Departmental Enquiry, it is not possible to hold that there are no grounds to presume that accused have committed offences alleged against them.
36. Sri.P.S.Rajagopal, learned senior counsel for accused would submit that Vijaya Bank had filed the first information on 15.4.1987. CBI had registered the first information on 24.12.1996, without there being any new material. The learned counsel has relied on the copy of first information said to have been submitted by CBI. The accused have not placed material to show that the 34 first information lodged by Bank had seen its logical end. On the other hand, resolutions passed by the Board of Directors from time to time would reveal that Board of Directors and Chairman of the Bank were reluctant to persuade the first information. They were interested in recovery of loan. There were half hearted efforts by concerned authorities of the Bank to set the criminal law into motion. It is not a situation, where the first information registered for certain offences, was investigated and the final report was submitted stating that no offence was made out against accused. Therefore, reluctance on the part of Bank to lodge the first information will not preclude CBI from investigating the first information lodged by Chief Vigilance Officer on 24.12.1996.
37. In a decision reported in (2009) 11 SCC 737 (in a case reported in R.VENKATAKRISHNAN vs. CENTRAL BUREAU OF INVESTIGATION), the Supreme Court has held that even if the Bank was not interested in prosecuting with 35 the criminal acts committed by its customer and its bank officials, it does not preclude CBI from taking up suo moto investigation. The Supreme Court has held that making available to public money by bank officials to a private party contrary to statutory provisions and departmental instructions, if dishonest intention is evident from facts, it would certainly attract criminal prosecution notwithstanding the fact that concerned bank officials do not come forward to lodge the first information.
38. The learned counsel for accused No.9 would submit that his client was a Professional Director of M/s. P.J.Pipes and Vessels Limited. He was not involved in the commission of aforestated acts. Therefore, the allegations made against him in final report are groundless.
Accused No.9 was not only Director of M/s.P.J.Pipes and Vessels Limited, but he was also a Director of M/s.Lodester Investment Private Limited, which was involved as intermediary for payment of customs duty by 36 M/s.P.J.Pipes and Vessels Limited. At this juncture, it is relevant to state that for payment of custom duty, M/s.P.J.Pipes and Vessels Limited had raised loan from Vijaya Bank. In the circumstances, there was no need to involve the intermediary for payment of custom duty. As already stated, accused No.9 was a Director of aforestated companies. The investigation report would reveal that accused No.9 had obtained letter from Maharashtra State Financial Corporation on the basis of which other accused had sanctioned loan of Rs.15 lakhs to M/s. P.J.Pipes and Vessels Limited. The investigation records would reveal that accused No.9 had entered into criminal conspiracy. He had obtained various loans from Vijaya Bank by fraudulent misrepresentation. He was also involved in misappropriation of loan by diverting funds to sister concern of M/s.Boilers Tube Company. Therefore, the submission of learned counsel for accused No.9 that his client was only a Professional Director and had nothing to do with the allegations made in the final report, cannot accepted. 37
39. The learned counsel for accused No.10 would submit that his client was a Nominal Director and he had resigned from the post of Directorship in the year 1991. The learned counsel has not placed any documents to prima facie establish that accused No.10 had ceased to be a Director of M/s. P.J.Pipes and Vessels Limited with effect from 31.3.1991. If accused No.10 had signed Form No.32 and kept it with him, it would be a self serving document. It is needless to state that acceptance of resignation of a Director should have concurrence of Registrar of Companies. If the Director wants to resign from Directorship, he has to submit Form No.32 and obtain approval from Registrar of Companies.
In the case on hand, investigation records would reveal that accused No.10 had entered into conspiracy with other accused in committing afore stated fraudulent acts. Therefore, submission of learned counsel for accused No.10 cannot be accepted.
38
40. The learned Trial Judge on proper consideration of investigation records has held that there are grounds to presume that accused have committed the offence alleged against them. There are no reasons to interfere with the impugned order.
41. Therefore, I pass the following:
ORDER Criminal Revision Petition Nos.925/2007, 984/2007, 840/2007, 1100/2007 and 801/2007 are dismissed. The impugned order is confirmed.
Office is directed to send back the lower court records along with a copy of this order. The learned Sessions Judge is directed to expedite the trial for which the accused shall extend their co-operation.
Sd/-
JUDGE Np/AHB