Bangalore District Court
(Rep. By Sr.App) vs No.2 & 3 Were The Managers Of The Said ... on 29 January, 2021
IN THE COURT OF THE I st ADDL.CMM: BENGALURU
Dated this the 29 th day of January 2021.
Present: Shri Bhat Manjunath Narayan,
B.Com., LL.B.
Ist Addl. C.M.M BENGALURU.
C.C.No.8197/2000
State by COD, Fraud Squad
Bengaluru. ....Complainant
(Rep. by Sr.APP)
Vs
1. B.N.Jaganatha (died)
2. Annegowda s/o late B.T.Sannappa,
Ex-Manager, Karnataka State
Co-operative Apex Bank,
West of Chord road,
II State Branch, Rajajinagar,
Bengaluru,
Flat No.166, 35th 'A' cross,
15th main, 4th 'T' block,
Jayanagar, Bengaluru 41.
(quashed by Hon'ble High Court)
3. N.A.Kuttaiah s/o N.B.Appachu,
Ex.In-Charge Manager,
Apex Bank, West of Chord road,
II Stage Branch, Rajajinagar,
Bengaluru 18,
Present Manager,
Inspection branch,
C.C.No.8197/2000
2
Head Ofce,
Chamarajpet, Bengaluru, .....Accused
(Rep. By Sri Bipinkumar Jain)
1. Sl. No. of the case : CC No.8197 of 2000
2. The date of commission of : 30.03.1987 to 04.10.1991
the ofence
3. Name of Complainant : Puttaraju
4. Name of the accused : As stated above
5. The ofences complained or : U/s 409, 477(A), 201 R/w
proved sec.34 IPC.
6. Plea of the accused and their : Pleaded not guilty
examination
7. Date of Commencement of : 09.02.2010
evidence
8. Date of Closing of : 10.01.2019
prosecution evidence
9. Opinion of Judge : Accused not guilty
10. Date of Judgment : 29.01.2021
(Bhat Manjunath Narayan)
Ist Addl. CMM., Bengaluru.
C.C.No.8197/2000
3
JUDGMENT
That, Police Inspector, Fraud Squad, COD, Bengaluru has fled charge sheet against the accused Nos.1 to 3 alleging that they have committed an ofence punishable under Section 409, 477(A), 201 R/w sec.34 of IPC.
2. The allegations made in the charge sheet are as under:
In the charge sheet it is alleged that the accused No.1 was the Cashier in Karnataka State Co-operative Apex Bank, West of Chord road branch, Bengaluru and accused No.2 & 3 were the Managers of the said branch during period of 1981 to 1991. It is alleged in the charge sheet that during the period of 06-01-1990 to 28-12-1990 the accused No.1 to 3 who are the authorities entrusted with the money of the bank have misappropriated an amount of ₹.41,88,476.50 with respect to receipts / remittance in the Karnataka State Co-operative Apex Bank, West of Chord road branch. It is also alleged in the charge sheet that the accused No.1 to 3 have received cash from various account holders, failed to make necessary entries in the cash book and have falsifed the accounts pertaining to the account holder. In the internal audit during the above said period C.C.No.8197/2000 4 187 such instance were traced. It is the specifc case of the prosecution that the accused No.1 to 3 during the period starting from 06-01-1990 to 28-12-1988 have destroyed the cash challans submitted by the account holders so as to conceal the ofence committed by them.
It is further alleged that the accused No.1 to 3 who have been entrusted with duties of maintaining books of accounts, cash scroll, long book, day book, general ledger and account ledger of respective holders have not made the entries in those registers and as such have committed the breached the trust.
3. Based upon the internal audit of Cw-2 Samiulla, D.Putaraju Manager of Karnataka State Co-operative Apex Bank Ltd., has fled complaint against the accused No.1 to 3 before Mahalakshmipuram police and criminal case is registered at Mahalakshmipuram PS Cr.No.312/1993 against the accused for the ofence punishable under Section 409, 467, 468, 471, 477(A), 201 R/w sec.34 of IPC. Thereafter case was transferred to Fraud squad COD Bangalore. The Investigating ofcer has recorded the statements of account holders, seized documents like cash scroll, ledger extract. The Investigating ofcer has also recorded the statements of C.W.2 Samiulla internal auditor who has helped the Karnataka State Co-operative Apex Bank to unearth the C.C.No.8197/2000 5 scam/misappropriation, came to a conclusion that during the period of 06-01-1990 to 28-12-1990 accused No.1 to 3 have misappropriated an amount of ₹.41,88,476.50 and caused loss to the Karnataka State Co-operative Apex Bank. Therefore, charge sheet has been fled by the Police Inspector, Fraud Squad, COD for the ofence punishable under section 409, 477(A), 201 r/w sec.34 of IPC.
4. After fling of charge sheet, cognizance for the ofence under Section 409, 477(A), 201 R/w sec.34 of IPC is taken and the presence of accused is secured by issuing summons. The accused No.1 to 3 have appeared and they were released on bail. Copies of the charge sheet is supplied to the accused Nos.1 to 3 as required under sec.207 of Cr.P.C.
5. During pendency of this case, the accused No.1 B.N.Jaganatha died and as such case against the accused No.1 came to be abated. The accused No.2 Annegowda who is one of the Manager against whom allegation of misappropriation was leveled by the Investigating ofcer has questioned taking cognizance by this court. Hon'ble High Court of Karnataka as per order passed in Crl. Petition No.3744/2016 dated 16-12-2016 has quashed the proceedings of this case against the C.C.No.8197/2000 6 accused No.2. After hearing the prosecution and accused No.3, Charge for the ofence punishable under section 409, 477(A), and 201 R/w sec.34 of IPC is framed against accused No.3. Accused pleaded not guilty & claims trail by this court.
6. In order to prove the guilt of the accused, out of 18 witnesses cited in the charge sheet, prosecution is able to secure presence of 6 witnesses and 48 documents are marked on behalf of prosecution. Originally charge sheet was fled before VIII ACMM and case was transferred to this court. But the documents marked were not sent along with fle. In spite of best eforts made by this court to secure documents, same is not secured as documents are not traced. My predecessors and this court has made eforts to reconstruct the documents but due to non-availability certifed copies or copies, re-construction was also not possible.
7. The presence of C.W.7, 9 to 18 could not be secured in-spite of issuance of repeated NBWs, proclamation and as such prayer of Senior APP to issue NBWs to these witnesses once again cam to be rejected by my predecessor. Even the investigating ofcers are not examined in this case though sufcient time was C.C.No.8197/2000 7 given earlier and after recall of witnesses-Investigating ofcer, by fling an application under sec.311 of Cr.P.C, they have failed to appear and depose before this court.
8. After completion of evidence of the prosecution witnesses, Statement of the accused No.3 as required under Section 313 of Cr.P.C. has been recorded. The accused Nos.3 has denied the incriminating evidence against him and he has not led any defence evidence in support of their contention.
9. On the basis of charge sheet allegation, the following points arose for my consideration:
1. Whether the prosecution proves beyond reasonable doubt that during the period starting from 06-1-1990 to 28-12-1990 the accused No.1, to 3 being employees of Karnataka State Co-operative Apex Bank, West of Chord road branch in collusion with each other with common intention have misappropriated an amount of ₹.41,88,476.50 by not accounting the receipt spreading over 187 instance by not mentioning the same in cash book and other books but crediting the same to S.B. account of the remitter and thereby committed an ofence C.C.No.8197/2000 8 punishable under Section 409 R/w sec.34 of IPC?
2. Whether the prosecution proves beyond reasonable doubt that the accused No.1 to 3 who are the employees of Karnataka State Co-operative Apex Bank, West of Chord road branch have committed the falsifcation of account maintained by them and thereby committed an ofence punishable under Section 477(A) R/w sec.34 of IPC?
3. Whether the prosecution proves beyond reasonable doubt that the accused No.1 to 3 in order to conceal the ofence have destroyed the cash challans submitted by account holders and thereby committed an ofence punishable under Section 201 R/w sec.34 of IPC?
4. What order ?
10. Heard Counsel appearing for the accused and learned Sr.APP. Perused the oral and documentary evidence adduced by the prosecution. My fndings on the above points are as under:
Point No.1 to 3 In the Negative Point No.4 : As per fnal order, for the following:
C.C.No.8197/2000 9 REASONS Point No.1 to 3:-
11. Point No.1 to 3 are taken for common discussion as they are arising out of same incident and in order to avoid repetition. However, separate fnding has been given to each point.
12. The Police Inspector, Fraud Squad, COD, Bengaluru has charge-sheeted the accused No.1 to 3 for the ofence punishable under section 409, 477(A), 201 R/w sec.34 of IPC. In order to prove the guilt of the accused for the above said ofence, frst prosecution has to prove that the accused No.1 to 3 are the employees of Karnataka State Co-operative Apex Bank and worked in West of Chord road branch, Bengaluru. The accused No.1 to 3 have not disputed that they are the employees of Apex Bank. As per records and as per the evidence given by P.W.2 Samiulla the accused No.3 N.K.Kuttaiah was the Manager from 04-10-1987 to 9-4-1991 on diferent dates. So from the evidence of Pw-2 Samiulla C.C.No.8197/2000 10 prosecution is able to prove that the accused No.1 to 3 are the employees of the Karnataka State Co-operative Apex Bank.
13. It is the case of the prosecution that Manager is the joint custodian of cash and keys along with cashier. Manager is the exclusive custodian of books of accounts and he is an independent and responsible ofcer of the bank. It is further case of the prosecution that Manager is the responsible for all the fnancial transaction and he is having control over the administrative staf and having over all supervision and control over the working of the branch. It is the case of the prosecution that the accused No.3 who has worked on diferent dates in the capacity of Manager in collusion with deceased accused No.1 B.N.Jaganatha has misappropriated the amount by not entering the receipts in cash scroll of Cashier and cash scroll maintained by the Manager and other daily registers. In order to prove the guilt of the accused, the prosecution has examined C.C.No.8197/2000 11 four witnesses out of 18 witnesses cited in the charge sheet. I have perused the evidence of P.Ws.1 to 6 in detail. P.W.1 D.Puttaraju is the retired Manager of Apex Bank who has fled the complaint in this case. D.Puttaraju in his evidence has stated that on the basis of report fled by the internal auditor C.W.2 Samiulla and as per the decision of the board he has fled complaint against the accused No.1 to 7 for misappropriation of amount by them during the above said period. P.W.1 has not stated anything in his examination-in-chief apart from stating that on the basis of board resolution he has fled complaint. So the evidence of Pw-1 Puttaraju is not helpful to prove the alleged misappropriation by the accused.
14. The main case of the prosecution is that the accused No.1 who is the Cashier though received the cash has not entered the same in cash scroll but the Manager in collusion with Cashier made credit entry in the ledger of the account holder. In order to prove this C.C.No.8197/2000 12 aspect, prosecution is relying upon the evidence of P.W.2 Samiulla Addl. Registrar of Co-operative Society who has conducted internal audit of the Karnataka State Apex Bank, West of Chord road branch, Bengaluru. P.W.2 in his evidence has deposed regarding the act of the accused No.1 for not entering the receipt of cash in the cash scroll. According to P.W.2 Samiulla the ledger contains the credit entry but cash scroll does not have corresponding remittance entry. However in the cross- examination of P.W.2 he has clearly admitted that he is not having qualifcation of Chartered Accountant but acquired knowledge of accountancy and audit. He further stated that he has not attended any training to do the auditing. P.W.2 has also admitted that cash scroll, ledger extract and other books tallies with each other. P.W.2 Samiulla has admitted in the cross examination that there was a audit by the statutory auditor of Karnataka State Co-operative Apex Bank and the balance sheet is also prepared. In cross-examination P.W.2 has admitted as under:
C.C.No.8197/2000 13 It is true to suggest that, balance sheet was prepared by the Apex bank, West chord road branch for the year from 01.04.1989 to 31.03.1990 and 01.04.1990 to 31.03.1991. It is not true to suggest that, the investigation ofcer has not shown the balance sheet for the above said period at the time of recording statement. The I.O. has not seized the said balance sheet for the above said period from me, which have collected from Head ofce. It is true to suggest that, the balance sheet submitted by the banks will be approved by the board of Directors and the same will passed in the general body meeting of the main cooperative bank. It is true to suggest that, the reconciliation of the account will be done by the bank as well as main bank. But, for the pending entries only.
C.C.No.8197/2000 14
15. So it is clear that after internal report of Pw-2 accounts are reconciled and balance sheet is prepared. No account holder has complained regarding non-receipt of amount after reconciliation of accounts. If amount is not received then defnitely after reconciliation of a/c, account holders would have fled complaint before bank. P.W.2 has also admitted that after submission of his report, Board has ordered for Re-audit of books of accounts and accordingly re-audit was done by the statutory auditor. It is also admitted by P.W.2 that statutory audit report and re-audit report was placed before Board of Directors & thereafter in general body meeting re-audit report submitted by Auditor came to be accepted. Witness C.W.2 has deposed that in the re- audit report also misappropriation incorporated as stated by him in this case. However audit report, re-audit report which is accepted by the Board of Directors of Karnataka State Co-operative Apex Bank, Bengaluru or balance sheet pertaining to West of Chord road branch for the period 1-1-1990 to 31-12-1990 is not produced C.C.No.8197/2000 15 by the Investigating ofcer to substantiate the allegations. So in the absence of audit report or balance sheet prepared by an Expert who is having knowledge of auditing the accounts, this court cannot base its opinion on the internal audit report submitted by P.W.2 which is not at all accepted by the Board of Directors.
16. The ordering of re-audit shows that the board of directors have not accepted the report of P.W.2. P.W.2. states that the entries are made in ledger extract pertaining to account holder but in consolidated cash entries are not made in cash scroll and other books to base this he says in evidence that he has seen the challans submitted by the account holder to the Cashier. It cannot be believed that after misappropriating the amount to such a huge extent, cashier has kept those cash challans in the bank only. The prosecution also alleges that the accused have destroyed the cash challans. At one breath P.W.2 says that he has verifed the cash challans and ledger with cash scroll and day C.C.No.8197/2000 16 book and in another breadth he says that cash challans or remittance challans were destroyed to conceal the misappropriation. The statement is contrary to the charges made. So if the evidence of P.W.2 is considered which is not at all substantiated by any documents it cannot be held that the accused No.3 has misappropriated the amount. Therefore, in my considered view the evidence of P.W.2 is not at all helpful to prove the misappropriation of funds by the accused No.3 in collusion with deceased accused No.1.
17. P.W.3 Chikkannagowda, P.W.4 Kempegowda, PW-5 Ranganathappa & PW-6 Pereddegowda who are the depositors of amount, have not stated the amount remitted by them is not credited to the account by the Karnataka State Co-operative Apex Bank and have not stated that the amount is misappropriated by the accused. So, the evidence of P.Ws.3 to 6 is also not helpful to prove the case of the prosecution.
C.C.No.8197/2000 17
18. In this case except the evidence of internal auditor P.W.2 which is not an expert, no other evidence is available which will show that accused No.3 in collusion with deceased Accused No.1 had misappropriated an amount of ₹.41,88,476.50. Apart from this even basic documents like attendance register to show as on the dates of misappropriation of amount accused were on duty. So in the absence of documentary evidence this court cannot come to a conclusion that the accused have misappropriated the amount.
19. Non- examination of Account holders to say that after reconciliation of account amount is not credited to account, non-production of Balance sheet for the year 1989-90 and 1990-91 accepted by Board of Directors in General body meeting and re-audit report is fatal to the case of the prosecution. So the oral as well as documentary evidence adduced by the prosecution is not sufcient to link the accused to the amount C.C.No.8197/2000 18 misappropriated. In fact the prosecution is unable to show that any amount is misappropriated by the ofcials of the Karnataka State Co-operative Apex Bank. Therefore, I am of the opinion that prosecution is unable to prove the guilt of accused for ofence punishable under section 409, 477(A), and 201 R/w sec.34 of IPC beyond reasonable doubt. Hence point No.1 to 3 have to be answered in the negative & against the prosecution. Accordingly, I answer point Nos.1 to 3 in the negative. Point No. 4:-
20. In view of discussion and conclusion arrived at point Nos.1 to 3, accused No.3 is entitled to be acquitted. Hence I proceed to pass following:
ORDER Acting under Section 248(1) of Cr.P.C. the accused No.3 is acquitted for the ofence punishable under Section 409, 477(A), and 201 r/w sec.34 of IPC.
C.C.No.8197/2000 19 The bail and surety bond of the accused No.3 stand canceled.
(Dictated to the stenographer, transcribed by her, revised and then corrected by me and then pronounced in open court on this the 29th day of January 2021).
(Bhat Manjunath Narayan) Ist Addl. CMM., Bengaluru.
ANNEXURE List of witnesses examined for prosecution :-
P.W.1, Doddaerappa, P.W.2, Samiulla, P.W.3, Chikkannagowda, P.W.4, Kempegowda; P.W.5, Ranganathappa, P.W.6, Pergadegowda;
List of exhibits marked for prosecution :-
Ex.P1, Copy of complaint, Ex.P2, Inspection report, Ex.P3, Inspection report, Ex.P4, SB account ledger, Ex.P5, Cashier cash scroll, Ex.P6, Duplicate cash scroll, Ex.P7, Long book, Ex.P8, Day book, Ex.P9, General ledger, Ex.P10, Cash counterfoil, Ex.P11, Long book, Ex.P12 & Ex.P13, Cash counterfoils, C.C.No.8197/2000 20 Ex.P14, Long book, Ex.P15 to Ex.P24, Cash counter foils, Ex.P25, SB account ledger, Ex.P26, Long book, Ex.P27, Day book, Ex.P28, General ledger, Ex.P29, Cashier cash scroll, Ex.P30, Cash counterfoil, Ex.P31, Long book, Ex.P32 to Ex.P37, Cash counter foils, Ex.P38, Duplicate cash scroll, Ex.P39 to Ex.P47, Cash counterfoils, Ex.P48, Long book, List of material object :
NIL List of documents marked for defence:-
NIL (Bhat Manjunath Narayan) Ist Addl. CMM., Bengaluru.
C.C.No.8197/2000 21 29/1/2021 State by Sr.APP Accused No.3 C/B For Judgment (Judgment pronounced in the Open Court) ORDER Acting under Section 248(1) of Cr.P.C. the accused No.3 is acquitted for the ofence punishable under Section 409, 477(A), and 201 r/w sec.34 of IPC.
C.C.No.8197/2000 22 The bail and surety bond of the accused No.3 stand canceled.
(Bhat Manjunath Narayan) I Addl. CMM., Bengaluru. C.C.No.8197/2000 23 C.C.No.8197/2000 24