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The Inspector of Police, CBI, ACB, Bengaluru filed charge sheet against accused persons for offences for the offences punishable under Sec.120B r/w 420 of IPC and under Sec.13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 ('P.C.Act' for short).

2. It is the case of the prosecution that a case came to be registered in RC 03(A)/2016 against accused No.1 N.Satyababu on the written information filed by PW1 G.C.Matolli, Deputy General Manager, Syndicate Bank, Regional Office, North, Bangalore. It has been contended that the accused No.1 N.Satyababu was working as Senior Manager, Syndicate Bank, Jalahalli Branch, Bengaluru during the period from 16.06.2014 to 20.03.2015. It has been stated that later on he was dismissed from the service by the competent authorities while working as Senior Manager, Syndicate Bank. The main contention of the prosecution is that the accused N.Satya Babu had entered into criminal conspiracy with accused No.2 Smt.Shobitha Sonath.K who was the Secretary of M/s.Sharon School ('School' for short) run by M/s.Sharon Educational Charitable Trust, at D.J.Halli, Bengaluru. It has been submitted that accused No.2 had applied for a loan under Micro and Small Enterprises Scheme ('MSE scheme' for short) towards purchase of furniture for the use of their school and had also enclosed the quotation from St. Anthony Industries, represented by PW6 Francis.V who was also close relative of accused No.2, to avail the loan. In pursuance of said criminal conspiracy entered between accused No.1 N.Satya Babu and accused No.2 Smt.Shobitha Sonath K, accused No.1 had accommodated her to credit facility as term loan under MSE scheme and processed the application and sanctioned loan to an extent of Rs.6.50 Lakhs. At the time of sanctioning of the loan, accused No.2 Smt.Shobitha.K had furnished necessary invoice allegedly issued by PW6 Francis. Further, it has been contended that though the amount was sanctioned under MSE Scheme, accused No.2 was required to purchase furniture required for the school totally to an extent of Rs.6.50 lakhs. It has been stated that the quotation which was furnished was for a sum of Rs.8.75 lakhs out of which the remaining amount was to be construed as margin money, which was required to be deposited by accused No.2 herself. It has also been stated that the investigation being conducted by the Internal Auditor of the Bank revealed that the accused No.2 had not purchased any furniture as prescribed by her by availing term loan of Rs.6.50 lakh from the bank and in fact the end usage of the loan was not as per the terms and conditions of the loan. It is the specific contention of the prosecution that the accused No.1 N.Satya Babu who was the Branch Manager at that point of time was responsible for verifying the documents and processing the loan application in accordance with law. It is contended that the Accused No.1 was required to strictly adhere to all the circulars and guidelines issued by the Reserve Bank of India (RBI for short) and also that of the Syndicate Bank from time to time and in derogation of the same, he had sanctioned the loan without obtaining necessary documents from the accused No.2 who was Secretary of the School. It is also submitted that the accused No.1 being the Senior Manager was duty bound to verify the documents in proper perspective and also he was required to verify as to whether the loan amount which was sanctioned and disbursed was utilized by beneficiary as per the terms and conditions mentioned in the loan sanction letter. Without obtaining any such materials, the act of accused No.1 would indicate of hatching of conspiracy by accused No.1 with accused No.2 who were holding responsible position in the school and had utilized the amount not for the purpose for which it was borrowed and furnished fake quotation and invoice and accordingly had misused the loan amount which was disbursed for purchasing furniture and other materials to the School. The alleged act was noticed during the course of internal audit being conducted by the PW3 Nagesh and the same came to be reported to the higher authorities of the Bank. On the basis of the same, the higher authorities had reviewed the loan applications which were processed and sanctioned by the accused No.1 and they had unearthed an act amounting criminal conspiracy by accused No.1 and 2 and also cheating and defrauding the public exchequer in particularly of the Bank. Accordingly, written information came to be filed. On the basis of the said written information, an FIR came to be registered by the Investigating Agency in RC 3(A)/2016 for the aforesaid offences and the Investigating Agency had commenced the investigation. The Investigating Officer during the course of his investigation had visited the bank and collected necessary materials pertaining tothe loan processing and sanctioning of loan to Sharon School represented by accused No.2 Smt.Shobitha.K. It has also been contended by the Investigating officer that during the course of his investigation he had visited the school along with PW3 Nagesh and PW4 Guruprasad with a photographer and noticed that no such structure was in existence at the address which was shown in the loan application as Sharon public School. Subsequently, an independent valuer was also appointed to look in to the aspect that whether the materials were obtained and had fulfilled the conditions of the loan. It was noticed that the building in which the alleged school was set up had already been vacated by accused No.2 and on telephonic call, she had stated that they were running the school in some other premises. In this regard, the I.O., had also recorded the statement of PW7 Jitendra Singh, who had stated that accused No.2 Shobitha was running the said School and was not regular in paying rent and as such she had vacated the premises in the month of May- 2016. On collection of such materials and documents pertaining to the filing of loan application, processing and sanctioning of loan to M/s.Sharon School, it was noticed that the end usage as indicated in the loan application, was not been made by accused No.2. The investigation also revealed entering of criminal conspiracy between accused No.1 N.Satya Babu and accused No.2 Smt.Shobitha.K and accordingly, the I.O. had proceeded to file the charge sheet against them.

"The gist of the offence of conspiracy then lies, not in doing the act, or effecting the purpose for which the conspiracy is formed, nor in attempting to do them, nor in inciting others to do them, but in the forming of the scheme or agreement between the parties. Agreement is essential. Mere knowledge, or even discussion, of the plan is not, per se enough".

37. If the said aspect is appreciated with the case on hand, it would indicate that the accused No.1 had sanctioned loan which was sought by the accused No.2 on behalf of the school. In this regard, reliance is placed on the loan application Ex.P.23 which indicates that the accused No.2 had filed application seeking for financial accommodation to an extent of Rs.8.50 lakhs. In fact Ex.P.23 loan application clearly describes that the school is being maintained under a Trust for which Mr.G.Rajarathnam, accused No.2 Smt.Shobitha Sonath K and Mr.V.Kanix Paul were the Trustees. In column No.8 it has been specifically stated that the activity which has been carried out by the Trust was with respect to education and they have proposed to avail loan for purchasing furniture. Further, they had sought for a term loan of Rs.6.50 lakh for purchase of desks and other school furniture from supplier M/s. Anthony Industries. In the 3rd page of the loan application the name of the Trustees and also their photograph are forthcoming, wherein the founder Trustee, the accused No.2 Secretary and the Treasurer have affixed their signatures to the loan application and also a quotation as per Ex.P.24 is forthcoming which is issued by St. Anthony Industries, wherein he had issued the same for Rs.8.75 lakhs. The said quotation is being admitted by PW6 Francis is the one he had issued. The document at Ex.P.25 is the receipt for having received a sum of Rs.2.50 lakhs by cash by St.Anthony Industries. However, the witness who was examined on behalf of St. Anthony Industries PW6 Francis has specifically denied of receiving any amount by way of cash. At this juncture, if the investigation report is to be appreciated at Ex.P.4, the main allegation which was leveled against accused No.1 is that he had disbursed the loan amount to an industry which was not at all in existence and the supplier St.Anthony Industries was not genuine and amount was disbursed to them. For the sake of convenience and also at the cost of repetition the evidence of PW6 is to be appreciated. During the course of his chief examination, it is his specific evidence that he had not supplied any furniture or materials to the Sharon School and also he has deposed that no invoice was being supplied by him. It is also relevant to note at this juncture, that he has admitted issuing quotation as per Ex.P.24 and has deposed that he had not received any advance amount to the extent of Rs.2.50 lakh through cash from the School. With this evidence, if the Internal Audit Report as per Ex.P.4 is to be appreciated, it would indicate that the internal investigator i.e., PW3 Nagesh had observed that no materials were purchased from St.Anthony Industries nor the said industry itself was in existence. If for the sake of convenience, the evidence of Investigation Officer PW14 Rakesh Ranjan is appreciated, it would indicate that he had recorded the statement of PW6 Francis on 25.01.2017. He has stated that the witness Francis had specifically narrated to him that the accused No.2 was his relative and he had issued blank quotation form and the contents were filled up by accused No.2 herself. With this evidence, the cross-examination of PW6 Francis is required to be appreciated. During the course of cross-examination, the witness has admitted that he was not in good terms with accused No.2 Shobitha and also he has specifically admitted that she was his distant relative. The undisputed fact which could be noticed from the above said aspect is that the witness as well as accused No.2 knew each other and though they were relatives they were not in good terms. It is relevant to note at this juncture that during the course of cross-examination, the witness was elicited with his bank account which he had maintained with Karnataka Bank. Though it is not in dispute that an account extract was produced before the court, which was also admitted by the witness and subsequently objection was raised by the learned Public Prosecutor with respect to its admissibility. The provision of Indian Evidence Act is very clear that when a document is confronted to a witness and though it is xerox copy and if the witness admits the same, the document could be marked for the purpose of evidence. It is also well settled principle of marking of document is only ministerial act and whereas the admission of a document is judicial act. Unfortunately, the said document was not marked in the instant case, since the accused had undertaken to summon the document through proper channel, which he had not made at the time of trial. Even otherwise, if the entire tenure of cross-examination is appreciated, it indicates that PW6 Francis had limpidly agreed that he received amount of Rs.6.41 lakh from School on 20.01.2015. It is also relevant to note at this juncture with respect to the transaction that had taken place. At the outset account extract which is more fully marked as Ex.P.44 would indicate the transfer of amount to an extent of Rs.6.41 lakh is forthcoming from the records wherein the same was transferred to the term loan account of the School. Subsequently, it is also noticed that on 20.01.2015, said amount was transferred wherein Demand Draft was purchased which is reflected from the account extract dated 20.01.2015 for a sum of Rs.6.25 lakh. At this juncture, if for a moment, observation made by the Internal Auditor is to be appreciated which is already discussed supra in the earlier part of the judgment that the end usage of the amount has to be given directly to the supplier, the purchasing of DD in favour of the supplier would indicate of complying the said stipulation. At this juncture, what is to be appreciated is whether any deviations are being made by the Manager of the Bank, if at all the accused No.1 and 2 had any intention to cheat and defraud the bank and had entered in to criminal conspiracy with each other. If the said aspect is to the considered in proper perspective, then the prosecution has to answer why the amount after its deposit to term loan account would be handed over to the supplier by way of demand draft. In the circumstances, it would indicate that the amount which was credited after disbursal to the term loan account was released in favour of the supplier himself by way of Demand Draft.

38. Be that as it may, at this juncture, the learned Public Prosecutor has vehemently argued that the end usage was utilized for the purpose for which it was sanctioned. It is his contention that after the amount was credited to the account on 6.1.2015 i.e., a sum of Rs.6,41,120/- the same was utilized by Accused No.2 for other purposes other than the one for which it was disbursed. In order to butters his contention he has relied upon the account extract and would indicate that a sum of Rs.4 lakh was withdrawn by the accused No.2 on the same day and also a sum of Rs.1.50 lakh , Rs.25,000/- 60,000/- was permitted to be withdrawn by the accused No.2 commencing from the 6th to 8th January, 2015 wherein a cheque was also issued in favour of BESCOM. At this juncture, if for a moment is considered that the accused No.2 had withdrawn the amount from her term loan account also, it is relevant to note at this juncture, that the learned counsel for accused has argued that the amount was withdrawn by the accused No.2 Shobitha, since, the supplier had insisted for making the payment by way of cash itself, since it was against the banking procedure, later on she had got it deposited back to the bank i.e., also within a span of two days and the records indicate that a sum of Rs.7 lakhs was being credited again to the account on 20th January itself. On the very same day, the demand draft for Rs.6.25 lakhs was purchased in the name of the supplier PW6-Francis. If once again the contention of the prosecution i.e., Internal Auditor PW3 Nagesh is appreciated, it indicates that he had not verified the accounts in proper perspective. That apart a duty was also casted upon the investigating agency i.e., the PW14 Rakesh Ranjan to appreciate the fact that whether PW6 was having a hostile attitude towards accused No.2. In other words the Investigating officer was entrusted with an onerous duty to verify the veracity of the witness before drawing any inference. Even otherwise, it is very much apparent from his cross-examination that he was not in good terms with accused No.2 Shobitha. Then the presumption which could be drawn at this juncture is that due to said animosity prevailing between then, he has not supported accused No.2 and has not deposed the true facts of incident. It is also relevant to note the amount of Rs.6.25 lakhs was credited to his account through DD. When the amount is handed over or deposited to the account through DD, it is the person in whose name the DD is purchased, is required to submit the same to his account for its encashment. If it was an account transaction made by using RTGS or NEFT, then it could have been assumed that the said transfer of amount would not have come to the knowledge of PW6 Francis. However, when he was specifically handed over with the DD as per the account extract at Ex.P.44, would indicate that the knowledge on the part of PW6 Francis of receiving the amount. The prosecution cannot blow hot and cold in one breath to indicate they were relying on the account extract which would indicate of purchase of DD of Rs.6.25 lakhs in favour of PW6 Francis, who had categorically admitted of having knowledge of the same subsequently. With the appreciation of evidence in chief and that of cross-examination coupled with the report of Internal Investigator at Ex.P.4 and with that of the evidence of Investigating Officer PW14 would only indicate that the Investigating Agency have not furnished or placed entire records before the Court. If for the sake of arguments, prosecution accepts the crediting of amount of Rs.6.25 lakhs through DD in favour of PW6 Francis, then the I.O. should have produced copy of the said DD or brought forth to the knowledge of the Court about the existence of such DD. However, the investigating Agency has not brought the same to the notice of the court, nor had taken any pains to collect the DD. The amount which was credited in to the account of Sharon School in the term loan account was transferred in favour of PW6 through DD. It is further interesting to note that PW6 in his cross-examination has further stated that he was an income tax assessee and he had also informed his auditor about the crediting of the said amount to his account. If for the sake of argument, it is accepted, then once again the case of the prosecution would be falsified for the reason that PW6 was not deposing truth before the court. He has deposed that he came to know of depositing of the amount only about four months prior to his evidence before the court. However, the categorical admission by him that he had informed his auditor about its deposit in the year 2015 itself while filing ITR would raise a serious question mark over the veracity of the witness who is appearing before the court. When a witness appears before the court, the court is duty bound to consider the fact whether he is deposing truly before the court and whether he is a sterling witness. The court is always concerned with the quality of the witness rather than the quantity of the witness who are being examined before the court.