Madras High Court
S.Nandakumar vs / on 10 October, 2023
Author: G.Jayachandran
Bench: G.Jayachandran
Crl.A.Nos.651,683,742,750,751 & 852 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 11.09.2023
Pronounced on :10.10.2023
CORAM:
THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN
Crl.A.Nos.651,683,742,750,751 & 852 of 2018
Crl.A.No.651 of 2018
S.Nandakumar
S/o T.Shanmugham,
Prop.Sri Ramajayam Tractors,
No.8/16, 1st Main Road,
Gandhi Nagar,
Vellore 632 006. .. Appellant/A2
/versus/
State rep.by
The Inspector of Police,
CBI/ACB/Chennai
RC No.22/A/2010 .. Respondent/Complainant
Criminal Appeal has been filed under Section 374 Cr.P.C., to call for the
records in judgment dated 23.10.2018 made in C.C.No.9 of 2012 on the file of
the learned XI Additional Special Court(CBI Cases Relating to Banks and
Financial Institutions at Chennai), peruse, hear the counsel and set aside the
conviction and sentence thereon, thereby acquit the appellant.
For Appellant :Mr.R.John Sathyan, Senior Counsel for
Mr.R.Harikrishnan
For Respondent :Mr.K.Srinivasan, Spl.P.P.(CBI)
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Crl.A.No.683 of 2018
R.Vijayan @ Vijayakumar .. Appellant/Accused No.4
/versus/
State rep.by
The Inspector of Police,
CBI/ACB, Chennai.
(R.C.No.22/A/2010) .. Respondent/Complainant
Criminal Appeal has been filed under Section 374 (2) Cr.P.C., to call for
the records in C.C.No.9 of 2012 on the file of learned XI Additional Special
Sessions Court, Judge, (Banking & Financial Institution Cases for CBI),
Chennai by its order dated 23.10.2018 and set aside the same and allow the
criminal appeal.
For Appellant :Mr.R.Bhagawat Krishna
For Respondent :Mr.K.Srinivasan, Spl.P.P.(CBI)
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Crl.A.No.742 of 2018:
V.Kannan ..Appellant/Accused-1
/versus/
State rep.by
The Inspector of Police,
CBI/ACB, Chennai.
(R.C.No.22/A/2010) .. Respondent/Complainant
Criminal Appeal has been filed under Section 374 (2) Cr.P.C., to allow
the criminal appeal to allow the criminal appeal to set aside the judgment passed
in C.C.No.9 of 2012, dated 23.10.2018 on the file of the XI Additional Special
Sessions Court, Chennai (Banks and Finance Industrial related CBI Cases).
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Crl.A.Nos.651,683,742,750,751 & 852 of 2018
For Appellant :Mr.K.Selvamani
For Respondent :Mr.K.Srinivasan,Spl.PP for CBI Cases
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Crl.A.No.750 of 2018
R.Tamilselvan .. Appellant/Accused No.6
/versus/
State rep.by
The Inspector of Police,
CBI/ACB, Chennai.
(R.C.No.22/A/2010) .. Respondent/Complainant
Criminal Appeal has been filed under Section 374 (2) Cr.P.C., to allow
the criminal appeal to set aside the judgment and sentence imposed on this
appellant/A6 by the learned 11th Additional Special Judge for CBI Cases (Banks
and Finance Institution Cases), Chennai passed in C.C.No.9 of 2012, dated
23.10.2018 and acquit the appellant.
For Appellant :Mr.R.Mohan
For Respondent :Mr.K.Srinivasan, Spl.P.P.(CBI)
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Crl.A.No.751 of 2018:
T.Kannan .. Appellant/Accused-8
/versus/
The State Rep.by
The Inspector of Police,
CBI/ACB/Chennai,
RC No.22/A/2010 .. Respondent/Complainant
Criminal Appeal has been filed under Section 374(2) of Cr.P.C., to set
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Crl.A.Nos.651,683,742,750,751 & 852 of 2018
aside the judgment and sentence imposed on this appellant/A8 by the learned XI
Additional Special Judge for CBI Cases(Bank and Financial Institution cases),
Chennai passed in C.C.No.9 of 2012 dated 23.10.2018 and acquit the appellant.
For Appellant :Mr.R.Mohan
For Respondent :Mr.K.Srinivasan, Spl.P.P for CBI Cases
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Crl.A.No.852 of 2018:
1.M.Elumalai
2.V.Perumal
3.S.Jayabal .. Appellants/Accused 7,9 and 10
/versus/
The State Rep.by
The Inspector of Police,
CBI/ACB/Chennai,
RC No.22/A/2010 .. Respondent/Complainant
Criminal Appeal has been filed under Section 374(2) of Cr.P.C., to set
aside the conviction and sentence passed by the lower Court in C.C.No.9 of
2012 dated 23.10.2018 by the Court of XI Additional Special Judge for CBI
Cases relating to Banks and Financial Institutions at Chennai and allow this
appeal with costs.
For Appellant :Mr.T.Sivanathan
For Respondent :Mr.K.Srinivasan, Spl.P.P for CBI Cases
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COMMON JUDGMENT
On 21.05.2010, based on the complaint received from the Assistant General Manager, Union Bank of India, Regional Office, Salem, the Superintendent of Police, Anti Corruption Bureau, CBI at Chennai registered a case in Crime No.RC MA1 2010 A 0022 against 10 named accused and others for offences under Sections 120B r/w 420, 409, 467, 468 r/w 471 IPC and Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988.
2. The gist of the complaint was that during the period between 12.02.2008 and 14.12.2008, Shri V.Kannan while serving as Branch Manager, Union Bank of India, Thiruvannamalai, Shri R.Vijayan, an agent for tractor dealers and various firms with the connivance of each other entered into a criminal conspiracy with an intent to cheat the Union Bank of India, Thiruvannamalai Branch, in the matter of sanctioning agricultural and crop loans etc. In pursuance of the conspiracy, Shri V.Kannan sanctioned and disbursed crop loans, pipe loans, etc., to an extent of Rs.101.38 lacs to the borrowers, who were canvassed and brought by the agent and the dealers firm without adequate primary security and by accepting fake and fabricated documents. Thereby, they caused a wrongful loss to a tune of Rs.109.22 lacs to https://www.mhc.tn.gov.in/judis 5/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 the bank including interest as on 31.03.2010.
3. On completion of investigation, the Investigation Officer filed 8 separate final reports for each set of conspiracy and conspirators. The accused are the bank Managers, traders/suppliers, facilitators and borrowers. These 8 final reports were taken cognizance by the Trial Court and assigned C.C.No.4 of 2012 to C.C.No.11 of 2012.
4. Final report in C.C.No.9/2012 filed against 10 accused. The modus operandi adopted by the accused persons in this case as revealed in the investigation is as below:
5. In pursuant to criminal conspiracy, A-1 the Bank Manager has entertained applications from A-6 to A-10 for power tiller loan. Without pre inspection, A-1 accepted the forged revenue documents and sanctioned loans. A-2 [S.Nandakumar], the proprietor of M/s Ramajayam Tractors, through his Manager Thangavinayam [A-3] and Salesman, Vijayan @ Vijayakumar [A-4] in connivance with Anjana [A-5] the Business facilator for Union Bank of India, interacted with the applicants A-6 to A-10 and collected their property https://www.mhc.tn.gov.in/judis 6/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 documents. EC, FMB sketch, Chitta and Adangal for the properties were forged. Legal opinion and valuation certificate from the panel lawyer and approved valuers were obtained by these staff and facilitator. In the course of collecting the revenue documents, whenever they found difficulty in getting it from the appropriate authorities, those documents were fabricated and produced to the Bank.
6. Nandakumar, who is dealer in tractor, got the loan applications of these 5 farmers for power tiller processed with the active help of A-1 by producing fabricated revenue documents. In spite of several short comings and defects in the loan applications, they were overlooked/ignored by A-1 and loans were sanctioned. Saving Banks Account in the name of the borrowers were operated by the representative of A-2. The loan money transferred to A-2 firm and A-2 instead of selling power tiller to those borrowers, had sold tractors by arranging loan from ICICI Bank taking the assistance of Vijayan @ Vijyakumar by misusing the power tiller loan money as margin money for the tractor loans. The tractors so purchased from A-2 by A-6 to A-10 were hypothecated to ICICI Bank. Whereas, no asset was created for the power tiller loans sanctioned by Union Bank of India.
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7. The following five incidence are the subject matter for trial in C.C.No.9/2012.
Instance 1: Shri R. Tamilselvam has applied for a loan of Rs.1,70,000/- for purchase of Power tiller (Loan account No.604/36). The land documents namely adangal, manual chitta, valuation certificate were fabricated and the signature of VAO was forged by Shri R.Vijayakumar as identified by the witnesses. Smt P. Anjana had written the Encumbrance Certificate on the instructions of Shri R. Vijayakumar and the said Encumbrance Certificate was also forged by Shir R. Vijayakumar. Forgery was also proved through the hand writing expert of Central Forensic Science Laboratory. Loan was sanctioned and disbursed by Shri V.Kannan by flouting the banking norms. No power tiller was supplied. Shri R.Vijayan had arranged loan for purchase of tractor from ICICI Bank, Vellore by using the power tiller loan obtained from Union Bank of India, Tiruvannamalai branch as margin money. The tractor was delivered by M/s Sri Ramajayam Tractors with the hypothecation clause of ICICI Bank which was with the knowledge of Shri S. Nandakumar, Proprietor. No asset was created for power tiller loan sanctioned by Union Bank of India. Shri V. Kannan had accepted the Equitable Mortgage on the certified copies of the documents and registered with Sub Registrar Office concerned which is against the norms of https://www.mhc.tn.gov.in/judis 8/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 the bank. M/s Sri Ramajayam Tractors are not authorised dealers for sale of power tillers. Hence, they cannot issue proforma invoice/quotation for power tiller. This was not verified by the Branch Manager before sanctioning of the loan. No assets were created for the loan sanctioned by Union Bank of India, Thiruvannamalai Branch.
Instance 2: Shri M. Elumalai has applied for a loan of Rs.1,70,000/- for purchase of power tiller (Loan account No.604/43). The land documents namely adangal, manual chitta, valuation certificate were fabricated and the signature of VAO was forged by Shri R. Vijaykumar as identified by the witnesses. Further, Tahsildar of Ginjee, VAOs have stated that those documents were not issued by them. Encumbrance Certificate was written by Smt P. Anjana on the instructions of Shri R. Vijaya Kumar. Without verifying the documents, the loan was sanctioned and disbursed by Shri V. Kannan. No power tiller was supplied. The investigation has revealed that for the purpose of selling tractor from M/s Sri Ramajayam Tractors, Shri Vijayan and Shri S.Thangavinayagam had arranged the tractor loan with ICICI bank, Vellore Branch in the name of Shri M. Elumalai by depositing the power tiller loan amount sanctioned by Union Bank of India, Tiruvannamalai as margin money. This was done by Shri Thangavinayagam, Manager and Shri Vijayakumar within the knowledge of the https://www.mhc.tn.gov.in/judis 9/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 Proprietor, Shri Nandakumar. The Tractor was delivered to the borrower with the hypothecation clause of ICICI Bank which was with the knowledge of the Proprietor, Shri Nandakumar. M/s Sri Ramajayam Tractors are not authorised dealers for sale of power tillers. Hence, they cannot issue proforma invoice/quotation for power tiller. No assets were created for the loan sanctioned by Union Bank of India, Thiruvannamalai Branch.
Instance No.3: Shri T. Kannan has applied for a loan of Rs.2,50,000/- for purchase of power tiller and rotavator (Loan account No.604/58). The No due certificate purported to have been issued by Indian Bank and Lakshmi Vilas Bank, Vellavelam were forged by Shri Vijayan as confirmed by the witnesses. Shri Vijayan and Shri Thangavinayagam had arranged tractor loan with ICICI bank, Vellore Branch by depositing the power tiller loan amount sanctioned by the Union Bank of India as margin Money. The tractor was delivered to the borrower with the hypothecation clause of ICICI Bank which was with the knowledge of the Proprietor, Shri Nandakumar. M/s Sri Ramajayam Tractors are not authorised dealers for sale of power tillers. Hence they cannot issue proforma invoice/quotation for power tiller. No assets were created for the loan sanctioned by Union Bank of India, Thiruvannamalai Branch.
Instance 4: Shri V. Perumal had applied for a loan of Rs.2,00,000/- for https://www.mhc.tn.gov.in/judis 10/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 purchase of a power tiller and cultivator (Loan account No.604/58). The loan was sanctioned and disbursed by Shri V. Kannan by flouting the norms of the bank. No power tiller was supplied. The investigation has revealed that for the purpose of selling tractor from M/s Sri Ramajayam Tractors, Shri Vijayan and Shri S.Thangavinayagam had arranged the tractor loan with ICICI bank, Vellore Branch in the name of Shri V. Perumal by depositing the power tiller loan amount sanctioned by Union Bank of India, Tiruvannamalai as margin money. The Tractor was delivered to the borrower with the hypothecation clause of ICICI Bank which was with the knowledge of the Shri Nandakumar, Proprietor. M/s Sri Ramajayam Tractors are not authorised dealers for power tillers. Hence, they cannot issue proforma invoice/quotation for power tiller. No assets were created for the loan sanctioned by Union Bank of India, Thiruvannamalai Branch.
Instance 5: Shri S. Jayabal has applied for a loan of Rs.2,00,000/- for purchase of power biller and plants. The loan was sanctioned and disbursed by Shri V. Kannan. No power tiller was supplied. However, Shri R. Vijayan had arranged loan for purchase of tractor from ICICI Bank, Vellore by using the power tiller loan obtained from Union Bank of India, Tiruvannamalai branch as margin money. The tractor was delivered by M/s Sri Ramajayam Tractors with https://www.mhc.tn.gov.in/judis 11/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 the hypothecation clause of ICICI Bank which was with the knowledge of the Proprietor, Shri Nandakumar. No asset was created for power tiller loan sanctioned by Union Bank of India. M/s Sri Ramajayam Tractors are not authorised dealers for power tillers. Hence, they cannot issue proforma invoice/quotation for power tiller. No assets were created for the loan sanctioned by Union Bank of India, Thiruvannamalai Branch.
8. One among 10 accused Thangavinayagam (A-3) got discharged. Against the remaining accused charges were framed for conspiracy under Sections 120 B r/w 409,420,467,468 and 471 IPC and Section 13(2) r/w 13(1)(d) of PC Act,1988 and for substantive offences under Section 420 IPC against all the accused; under Sections 467 and 468 IPC against A4 to A-10; under Sections 471, 468 IPC against A-6 to A-10; under Section 409 IPC and Section 13(2) r/w 13(1)(d) of PC Act against A-1.
9. To prove the charges prosecution examined 16 witnesses. Exhibited 91 documents. On the side of the defence, 9 documents were https://www.mhc.tn.gov.in/judis 12/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 exhibited. As court document, Ex.C-1 marked.
10. The trial Court after considering the evidence, convicted the accused as below:-
Name and rank of Conviction under Section Sentence imposed by the trial Court the accused V.Kannan(A-1) Under Sections 120-B r/w 409 To undergo 4 years RI and to pay a IPC, 420, 467, 468 and 471 IPC fine of Rs.10,000/-, in default to and Section 13(2) r/w 13(1)(d) of undergo 1 year SI. PC Act Under Section 420 of IPC To undergo 4 years RI and to pay a fine of Rs.10,000/-, in default to undergo 1 year SI Under Section 13(2) r/w 13(1)(d) To undergo 4 years RI and to pay a of PC Act fine of Rs.10,000/- in default to undergo 1 year SI Under Section 409 of IPC To undergo 4 years RI and to pay a fine of Rs.10,000/-in default to undergo 1 year SI S.Nandakumar Under Sections 120-B r/w 409 To undergo 4 years RI and to pay a (A-2) IPC, 420, 467, 468 and 471 IPC fine of Rs.10,000/- in default to and Section 13(2) r/w 13(1)(d) of undergo 1 year SI PC Act Under Section 420 IPC To undergo 4 years RI and to pay a fine of Rs.10,000/- in default to undergo 1 year SI Vijayan @ Under Sections 120-B r/w 409 To undergo 4 years RI and to pay a Vijayakumar (A-4) IPC, 420, 467, 468 and 471 IPC fine of Rs.10,000/-, in default to and Section 13(2) r/w 13(1)(d) of undergo 1 year SI. PC Act Under Section 420 IPC To undergo 4 years RI and to pay a fine of Rs.10,000/- in default to undergo 1 year SI Under Section 467 IPC To undergo 4 years RI and to pay a fine of Rs.10,000/- in default to https://www.mhc.tn.gov.in/judis 13/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 Name and rank of Conviction under Section Sentence imposed by the trial Court the accused undergo 1 year SI Under Section 468 IPC To undergo 4 years RI and to pay a fine of Rs.10,000/- in default to undergo 1 year SI R.Tamilselvan Under Sections 120-B r/w 409 To undergo 1 year RI for each of the (A-6) IPC, 420, 467, 468 and 471 IPC accused and to pay a fine of M.Elumalai(A-7) and Section 13(2) r/w 13(1)(d) of Rs.1000/- each of the accused, in S.Jayapal(A-10) PC Act default to undergo 3 months SI each of the accused (3x1000=3000) Under Section 467 IPC To undergo 1 year RI for each of the accused and to pay a fine of Rs.1000/- each of the accused, in default to undergo 3 months SI each of the accused(1000x3=3000) Under Section 468 IPC To undergo 1 year RI for each of the accused and to pay a fine of Rs.1000/- each of the accused, in default to undergo 3 months SI each of the accused(3x1000=3000) Under Section 471 r/w 468 IPC To undergo 1 year RI for each of the accused and to pay a fine of Rs.1000/- each of the accused, in default to undergo 3 months SI each of the accused T.Kannan(A-8) Under Sections 120-B r/w 409 To undergo 1 year RI for each of the V.Perumal(A-9) IPC, 420 IPC and Section 13(2) accused and to pay a fine of r/w 13(1)(d)of PC Act Rs.1000/- for each of the accused in default to undergo 3 months SI.
(1000x2=2000)
Accused 6 to Under Section 420 of IPC To undergo 1 year RI each of the
Accused 10 accused and to pay a fine of
Rs.1000/- each of the accused in
default to undergo 3 months SI for
each of the accused.
The 5th accused Anchana was acquitted from all the charges. The period of sentence was ordered to run concurrently. The period of sentence already https://www.mhc.tn.gov.in/judis 14/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 undergone by the accused was set off. As far as the 1st accused(V.Kannan) is concerned, the period of sentence was ordered to run concurrently with the period of substantive sentence imposed in C.C.Nos.4,5,6 and 7 of 2012. The 4 th accused(Vijayan @ Vijayakumar) is concerned, the period of sentence shall also run concurrently with the period of substantive sentence imposed in C.C.Nos.4,5,6 and 7 of 2012.
11. Being aggrieved, the following appeals are preferred by the accused who were found guilty and sentenced as above.
Crl.A.No.651/2018: S.Nandakumar(A-2) Crl.A.No.683/2018 : R.Vijayan @ Vijayakumar ( A-4) Crl.A.No.750/2018 : R.Tamilselvan(A-6) Crl.A.No.751/2018 : T.Kannan(A-8) Crl.A.No.742/2018: V.Kannan(A-1) Crl.A.No.852/2018: M.Elumalai(A-7), V.Perumal(A-9) and S.Jayapal (A-10)
12. The appellants broadly fall under three categories. First, the public servant [A-1], the Bank Manager, who sanctioned loan. The second category is the trader [A-2] and his representatives [A-4 and A5], who gave fake invoices https://www.mhc.tn.gov.in/judis 15/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 for power tillers, fabricated revenue documents arranged tractor loan with ICICI Bank and delivered tractor to them. Third, the borrowers/farmers who availed power tiller loan from Union Bank of India used the loan amount to buy tractor availing loan from ICICI Bank.
13. Crl.A.No.742/2018
The learned counsel for A-1, the Branch Manager, who had sanctioned the loans to A-6 to A-10 for purchase of the power tillers, contended that, based on the documents, opinion of the panel lawyer and valuation certificate, he sanctioned loan to these farmers. Prior to sanctioning of loan he conducted inspection and being satisfied, he prepared the sanction advice. The power tiller was delivered and the dealer M/s Ramajayam Tractors had issued receipts. The omission to register the power tiller is not a violation of Motor Vehicle Act. The trader, who sold tractor instead of power tiller and the farmer who bought it alone are responsible for the act of cheating. For their dishonesty, the Bank Manager cannot be held criminally liable.
14. The learned Counsel for A-1 further submitted that all these 5 borrowers (A-6 to A-10) had in fact repaid the loan amount and there is no due https://www.mhc.tn.gov.in/judis 16/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 payable. Ex.C-1 proves the fact that the loans discharged. There is no monetary loss to the bank. Therefore, the conviction against A-1 has to be setaside. 15. Crl.A.No.852/2018
The appellants(A-7, A-9 and A-10) are the borrowers. The learned counsel in the written argument had contended that, there is no meeting of mind between the borrower, banker and the supplier to do any illegal act. There was no dishonest intention for the borrower to cheat the Union Bank of India. They approached A-2, the Proprietor of M/s Ramajayam Tractors for purchase of a tractor. They did not forge any documents. The title documents were given to the representatives of M/s Ramajayam Tractors and they arranged for loan and supplied tractor. They duly registered it and insured. The loan extended by the Bank is well secured by creating equitable mortgage and the loan amount also repaid.
16. There is no wrongful loss to the Bank. Belated payment of the due is only a breach of contract and not a criminal offence. The borrowers had no intention to deceive the Union Bank of India at any point of time. At the time of delivery of power tiller, photographs were taken and produced to the bank. The IO did not place those photographs.
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17. The registration of power tiller at RTA is not mandatory. Same is admitted by PW-1 and PW-8. Neither in Thiruvannamalai District nor in other banks while sanctioning loan for purchase of power tillers, they don’t insist for registration since it not mandatory under Motor Vehicles Act. The omission to register or failure to insure the power tiller is not an evidence to presume, the appellants had no intention to buy power tiller or did not buy power tiller. 18. Crl.A.No.750/2018
Tamilselvan (A-6) the appellant contended that the prosecution has failed to prove the charge of conspiracy. The loan application in his name was properly processed by A-1 the Bank Manager and A-4 , the representative of M/s Ramajeyam Tractors. He had no knowledge about the unlawful design conceived by A-1 and others. Even according to the prosecution witnesses, the alleged fabrication of revenue documents were done only by Vijayakumar and not this appellant. The illegal act of A-1 and A-4 came to his knowledge only after CBI enquired him. Immediately, he foreclosed the loan account. There is no wrongful gain to him or any corresponding wrongful loss to the Bank. CA 751/2018 https://www.mhc.tn.gov.in/judis 18/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018
19. T.Kannan (A-8) challenges the finding of the trial Court on the ground that, the case of the prosecution that this appellant (A-8 ) along with the bank Manager (A-1), Nandakumar the proprietor of M/s Ramajeyam Motors (A-2) and his salesman Vijayakumar (A-4) entered into criminal conspiracy to cheat Union Bank of India is ill-found and not proved. Only on presumption, the trial Court has convicted him. It was A-1 and A-4 without proper processing the loan application committed the crime of cheating the bank and not this appellant. For offence under Section 420 IPC or 409 IPC the necessary ingredients are not made out by the prosecution. However, the trial Court has convicted him and other borrowers with any proof for meeting of mind to do any illegal act.
20. Per contra, the Learned Special Public Prosecutor appearing for CBI submitted that the prosecution through the witnesses and evidence had clearly proved that, loan from Union Bank of India, Thiruvannamalai Branch was availed for purchase of power tillers. For availing loan, revenue documents were forged. After availing loan, the dealer M/s Ramajeyam Tractors instead of https://www.mhc.tn.gov.in/judis 19/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 supplying power tillers to the borrowers, had arranged for loan for them in ICICI bank and sold tractors to them. The loan amount disbursed by Union Bank misused for purchase of tractors. The Bank manager who is supposed to disburse the loan after proper inspection, getting the engine number, chassis number and registration with RTA along with insurance had deliberately failed to collect these particulars to enable the other accused to misuse the loan amount.
21. The Learned Special Public Prosecutor submitted that the loan files in respect of A-6 to A-10 are marked as Ex.P-12 to Ex.P-16, the internal investigation report Ex.P-20 and the testimony of PW-3, the receipts given by A-2 which are marked as Ex.P-38 to Ex.P-42 prove that A-6 to A-10 knowingly applied for power tiller loan furnishing fabricated revenue records. In connivance with A-2, A-4 and A-5, loan documents were fabricated and A-1 accepted those fabricated document and without inspection and without securing the power tiller as primary security, sanctioned loans to them. He further allowed A-2 to use the loan amount as margin money for the tractors loan advanced by ICICI Bank and sold 5 tractors bearing registration No: TN 25 K 7684, TN 32 Q 5772, TN 25 L 0373 TN 25 L 0445 and TN 25 L 0326 to https://www.mhc.tn.gov.in/judis 20/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 A-6 to A10 respectively. No power tiller sold by A-2 and without hypothecating the power tiller and without mentioning its engine number and chassis number in the loan documents A-1 put the bank in disadvantage without securing the loan with primary security and to rely upon the collateral security, which were not free from encumbrance. Fabricated encumbrance certificates issued suppressing encumbrance.
22. Heard the counsels. Records perused.
23. The evidence for prosecution reveals that, the Appellant V.Kannan (A-1) while he was the Branch Manager of Union Bank of India, Thiruvannamalai. Had received the loan applications of R.Tamilselvan (A-6) on 26/08/2008. A sum of Rs.2,00,000/- sanctioned by A-1, based on the proforma invoice issued by M/s Ramajayam Tractors dated 25/08/2008. A copy of the adangal in the name of Tamilselvan issued by VAO, Venniyanthgal Village. The EC is fabricated by A-4, as per the opinion of PW-14, the hand writing expert. A-2 had issued a cash receipt for Rs.2,00,000/- as if he received money and sold power tiller to R.Tamilselvan (A-6). Whereas, Ex.P-87 is the file containing the Registration Certificate of the tractor TN 25K 7684 in the name of Tamilselvan. https://www.mhc.tn.gov.in/judis 21/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 The RC Book further reveals that the vehicle hypothecated to ICICI Bank. Sale certificate dated 30/07/2008 from Sri Ramajayam Tractors is enclosed along with the request of ICICI Bank to record hypothecation in the RC book. R.Tamilselvan had requested RTO, Thiruvannamalai, to give road tax exemption, since he inclined to use the tractor exclusive for agricultural purpose. While so, the documents in the file marked as Ex.P-12, which relates to loan in respect of power tiller sanctioned by A-1, there is no piece of document to believe A-2 sold power tiller to A-6 on receipt of Rs.2,00,000/- and issuing the receipt. The file contains mostly printed forms like declaration, hypothecation, interview-cum-assessment form, deed of guarantee etc., most of these forms are left blank except the signature of the borrower. In some of the forms, even the borrower signature is not found. The letter of deposit of title deed obtained by equitable mortgage not registered. There is no sign of power tiller sale available in the file. No reference of its engine number or chassis number in these documents clearly proves the case of the prosecution that the loan sanctioned to buy power tiller used as margin money to buy tractor getting loan from ICICI Bank.
24. Similarly, Ex.P-13 is the loan file of Elumalai (A-7). A proforma https://www.mhc.tn.gov.in/judis 22/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 invoice by Sri Ramajayam Tractor dated 25/08/2008 is available in the file. The income certificate for Elumalai in the name of VAO of Aathipattu Village group is enclosed. The handwriting expert opinion is indicting A-4. The signature in the income certificate tallies with the signature of A-4. The sanction advice is prepared by A-1. Receipt dated 12/09/2008 acknowledging the receipt of Union Bank of India Draft for Rs.2,00,000/- for Elumalai is issued by A-2 M/s Ramajayam Tractors. Only proforma invoice is available and not invoice for sale of power tiller produced to the bank by the A-2 or the borrower A-7. A-1 who is supposed to make post sanction inspection and collect the invoice copy, registration copy, insurance copy, the engine number and chassis number of the power tiller, has not collected any of these details. The printed forms connected with loan are mostly unfilled. Ex.D-6 is the letter of Elumalai (A-7) dated 31/12/2009. In this letter, A-7 admits that he purchased power tiller out of the loan amount, but sold it within 4 months and spend out the sale proceeds. This letter is given by A-7 at the instance of A-1, who had sensed danger and investigation about the irregularities been commenced.
25. Ex.P-14 is the loan file of T.Kannan (A-8). His loan file is also similar to the loan file of A-6 [Tamilselvan]. In addition, a fake no due https://www.mhc.tn.gov.in/judis 23/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 certificate from Indian Bank, Vettavalam Branch, had been enclosed along with the loan application. After commencement of internal inspection, Union Bank has requested to confirm its genuineness. The Indian Bank had replied that they have not issued the said no due certificate.
26. Ex.P-15 is the loan file of V.Perumal and Ex.P-16 is the loan file of S.Jeyapaul. They both have purchased tractor using the loan money availed for buying power tiller. The tractors were sold by A-2 and the invoice, RC and insurance papers are marked as Ex.P-88 to Ex.P-91. For purchase of the said tractor, these accused have availed loan from ICICI Bank and used the loan money of Union Bank is shown as margin money. Accused A-6, A-7, A-9 and A-10 had in writing given letter Ex.D-5 to Ex.D-8 admitting the conversion of loan amount.
27. The bank manager who is expected to be vigilant in protecting the interest of the bank had miserably failed in his duty. He had not conducted the pre sanction inspection and post sanction inspection. He had not collected the RC book and insurance cover for the power tiller which alleged to have purchased by A6 to A10. The second accused as the proprietor of M/s Ramajayam Tractors had facilitated the farmers to avail loan from UBI for https://www.mhc.tn.gov.in/judis 24/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 power tiller and use the loan money as margin to buy tractor with finance from ICICI Bank. For such illegal misappropriation, the other accused A3 to A5 had assisted. Documents were fabricated through A3 to A5. To successfully complete the fraud of this kind, without meeting of mind and participation of the accused A-1, A-2, A-4 and the borrower A-6 to A-10 is impossible.
28. Therefore, this Court confirms the judgment of the trial Court conviction. So far as sentence, the fact that A1 as branch manager had brought business to the bank by improving its customer base and his error of judgment in respect of the dealers had landed him in the trouble. Similarly the borrowers having realised their misdeed, repaid the loan amount and their statement of accounts indicates pending trial they all have repaid the loan and closed the accounts.
29. Therefore, the sentence imposed is modified as below:-
Name and Conviction under Sentence imposed by the Sentence modified by rank of Section trial Court this Court the accused V.Kannan Under Sections 120-B To undergo 4 years RI and To undergo 2 years SI (A-1) r/w 409 IPC, 420, 467, to pay a fine of Rs.10,000/-, and to pay a fine of 468 and 471 IPC and in default to undergo 1 year Rs.10,000/-, in default to Section 13(2) r/w SI. undergo 1 year SI.
https://www.mhc.tn.gov.in/judis 25/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 Name and Conviction under Sentence imposed by the Sentence modified by rank of Section trial Court this Court the accused 13(1)(d) of PC Act Under Section 420 of To undergo 4 years RI and To undergo 2 years SI IPC to pay a fine of Rs.10,000/-, and to pay a fine of in default to undergo 1 year Rs.10,000/-, in default to SI undergo 1 year SI Under Section 13(2) To undergo 4 years RI and To undergo 2 years SI r/w 13(1)(d) of PC Act to pay a fine of Rs.10,000/- and to pay a fine of in default to undergo 1 year Rs.10,000/- in default to SI undergo 1 year SI Under Section 409 of To undergo 4 years RI and To undergo 2 years SI IPC to pay a fine of Rs.10,000/- and to pay a fine of in default to undergo 1 year Rs.10,000/-in default to SI undergo 1 year SI S.Nanda Under Sections 120-B To undergo 4 years RI and To undergo 2 years SI kumar r/w 409 IPC, 420, 467, to pay a fine of Rs.10,000/- and to pay a fine of (A-2) 468 and 471 IPC and in default to undergo 1 year Rs.10,000/- in default to Section 13(2) r/w SI undergo 1 year SI 13(1)(d) of PC Act Under Section 420 IPC To undergo 4 years RI and To undergo 2 years SI to pay a fine of Rs.10,000/- and to pay a fine of in default to undergo 1 year Rs.10,000/- in default to SI undergo 1 year SI Vijayan @ Under Sections 120-B To undergo 4 years RI and To undergo 2 years SI Vijaya r/w 409 IPC, 420, 467, to pay a fine of Rs.10,000/-, and to pay a fine of kumar (A- 468 and 471 IPC and in default to undergo 1 year Rs.10,000/-, in default to
4) Section 13(2) r/w SI. undergo 1 year SI.
13(1)(d) of PC Act Under Section 420 IPC To undergo 4 years RI and To undergo 2 years SI to pay a fine of Rs.10,000/- and to pay a fine of in default to undergo 1 year Rs.10,000/- in default to SI undergo 1 year SI Under Section 467 IPC To undergo 4 years RI and To undergo 2 years SI to pay a fine of Rs.10,000/- and to pay a fine of in default to undergo 1 year Rs.10,000/- in default to SI undergo 1 year SI https://www.mhc.tn.gov.in/judis 26/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 Name and Conviction under Sentence imposed by the Sentence modified by rank of Section trial Court this Court the accused Under Section 468 IPC To undergo 4 years RI and To undergo 2 years SI to pay a fine of Rs.10,000/- and to pay a fine of in default to undergo 1 year Rs.10,000/- in default to SI undergo 1 year SI R.Tamil Under Sections 120-B To undergo 1 year RI for To undergo 1 year SI selvan r/w 409 IPC, 420, 467, each of the accused and to for each of the accused (A-6) 468 and 471 IPC and pay a fine of Rs.1000/- each and to pay a fine of M.Elu Section 13(2) r/w of the accused, in default to Rs.1000/- for each of malai 13(1)(d) of PC Act undergo 3 months SI each of the accused, in default to (A-7) the accused undergo 3 months SI S.Jayapal (3x1000=3000) each of the accused (A-10) (3x1000=3000) Under Section 467 IPC To undergo 1 year RI for To undergo 1 year SI each of the accused and to for each of the accused pay a fine of Rs.1000/- each and to pay a fine of of the accused, in default to Rs.1000/- each of the undergo 3 months SI each of accused, in default to the accused undergo 3 months SI each of the accused Under Section 468 IPC To undergo 1 year RI for To undergo 1 year SI each of the accused and to for each of the accused pay a fine of Rs.1000/- each and to pay a fine of of the accused, in default to Rs.1000/- each of the undergo 3 months SI each of accused, in default to the accused undergo 3 months SI each of the accused Under Section 471 r/w To undergo 1 year RI for To undergo 1 year SI 468 IPC each of the accused and to for each of the accused pay a fine of Rs.1000/- each and to pay a fine of of the accused, in default to Rs.1000/- each of the undergo 3 months SI each of accused, in default to the accused undergo 3 months SI each of the accused T.Kannan( Under Sections 120-B To undergo 1 year RI for To undergo 1 year SI https://www.mhc.tn.gov.in/judis 27/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 Name and Conviction under Sentence imposed by the Sentence modified by rank of Section trial Court this Court the accused A-8) r/w 409 IPC, 420 IPC each of the accused and to for each of the accused V.Perumal and Section 13(2) r/w pay a fine of Rs.1000/- for and to pay a fine of (A-9) 13(1)(d)of PC Act each of the accused in Rs.1000/- for each of default to undergo 3 months the accused in default to SI. undergo 3 months SI.
(1000x2=2000) (1000x2=2000) Accused 6 Under Section 420 of To undergo 1 year RI each To undergo 1 year SI to IPC and to pay a fine of for each of the accused Accused Rs.1000/- each in default to and to pay a fine of 10 undergo 3 months SI for Rs.1000/- for each of each of the accused. the accused in default to (5x1000=5000) undergo 3 months SI for each of the accused.
(5x1000=5000)
30. In the result, these Criminal Appeals are partly allowed. The judgment of conviction passed by the learned XI Additional Special Court (CBI Cases Relating to Banks and Financial Institutions at Chennai) dted 23.10.2018 is confirmed. The period of sentence imposed to A-1(V.Kannan), shall run concurrently with the sentence imposed in C.C.No.4/2012 as modified as Crl.A.No.740 of 2018. The period of sentence imposed to A-4 (R.Vijayan @ Vijayakumar) shall run concurrently along with the sentence imposed in C.C. No.4/2012 as modified as Crl.A.No.680 of 2018. Period of sentence already undergone by the accused shall set off. The trial Court is directed to arrest the https://www.mhc.tn.gov.in/judis 28/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 appellants and send them to judicial custody to undergo for the remaining period of sentence.
10.10.2023 Index:yes/no Speaking order/non speaking order ari To:
1.XI Additional Special Court (CBI Cases Relating to Banks and Financial Institutions), Chennai.
2.The Inspector of Police, CBI/ACB/Chennai.
3.The Special Public Prosecutor for CBI, High Court, Madras.
Dr.G.JAYACHANDRAN, J.
ari https://www.mhc.tn.gov.in/judis 29/30 Crl.A.Nos.651,683,742,750,751 & 852 of 2018 common judgment made in Crl.A.Nos.651,683,742,750,751 & 852 of 2018 10.10.2023 https://www.mhc.tn.gov.in/judis 30/30