Back
2011 Supreme(Ker) 350
HIGH COURT OF KERALA
P.S. GOPINATHAN
A. Sreedharan
Versus
State Of Kerala, Represented by Public Prosecutor
CRL.A. Nos. 743, 744, 745, 746, & 747 of 2003
Decided on : 06-04-2011
For the Petitioner:V. Anil, George Mathew, Advocates.
For the Respondent:M.V. Jiji, Advocate, B. Vinod, Public Prosecutor.
Headnote:
Criminal Law - Criminal Trial - Prevention of Corruption Act, 1988 - Sections 13(2), 13( 1)(c) and 13(1)(d) - Appeal against conviction - Three loan applications were filed by PW2 but name, address and other particulars shown in the loan applications are not correct and that though those persons had executed mortgage deeds in favour of the Bank, property was not situated within limits of Service Co-operative Bank and that the property offered as security as per the loan applications are entirely different - Alleged that accused in furtherance of their criminal conspiracy falsified documents and the loanees availed loans, by various occasions, totally amounting of Rs.1,90,185/- using the forged documents as genuine documents - Held, Trial court ought to have given benefit of doubt to appellant, especially when\ Sub Committee members and Agricultural Officer who had inspected the properties and certified the correctness of the particulars in the loan application, feasibility of the loan etc. were acquitted - Appellant cannot be placed at a different level. If the evidence of Pws.1, 3 and 5 are read with Ext.P44, duty of appellant was only after sanctioning and disbursing of the loan - His duty was only to verify the utilization of the loan. It appears that the fraud was committed at the primary Bank level viz., among Secretary, President, Sub Committee members, Agricultural Officer and finally he Board of Directors of Erath Service Co-operative Bank - There is nothing to suggest that appellant who was an employee of the District Co-operative Bank had knowledge or share of brain. Probably, had the appellant been shrewd he could have detected the fraud - There may be lack of shrewdness - Such lack of shrewdness may, sometimes, lead to civil liabilities, but not criminal liability - Appellant is entitled to benefit of reasonable doubt and is entitled to an order of acquittal - Appeals are allowed.
Key Points: - The appellant, Inspector at District Co-operative Bank, was prosecuted for offences under PC Act Sections 13(2) r/w 13(1)(c),(d) and IPC Sections 409, 468, 471, 120B for failing to detect fraud in loan applications involving forged documents and bogus properties (!) [15000245390001]. - Loan applications were processed and recommended by Secretary, Sub Committee, President, Agricultural Officer, and Board of Directors of Erath Service Co-operative Bank before reaching District Co-operative Bank (!) [15000245390003]. - Prosecution alleged appellant, in conspiracy, did not scrutinize loan applications, mortgage deeds, and property details, allowing disbursement of Rs.1,90,185/- (!) [15000245390004]. - Trial court convicted appellant under Section 13(2) r/w 13(1)(d) PC Act and Section 120B IPC, sentencing him to one year RI and fine, but acquitted others including Sub Committee members and Agricultural Officer (!) [15000245390001]. - No reliable documentary evidence like circulars or booklets proved appellant's duty to scrutinize loan applications, properties, or titles before sanctioning; Ext.P44 indicated duty only for post-disbursement utilization verification [15000245390003][15000245390004]. - Oral evidence of PWs 1, 3, 5 on appellant's duties lacked documentary support and could not establish criminal liability [15000245390003]. - Fraud occurred at primary bank level among Secretary, President, Sub Committee, Agricultural Officer, and Board; no evidence appellant had knowledge or involvement [15000245390004]. - Lack of shrewdness to detect fraud may lead to civil liability but not criminal liability; appellant entitled to benefit of doubt, especially since co-accused who inspected properties were acquitted [15000245390004]. - High Court allowed appeals, set aside conviction and sentence, acquitted appellant, and ordered refund of fine (!) .
1. The appellant is the fifth accused in C.C.Nos.82, 83, 84, 85 and 86/2007 on the file of the Enquiry Commissioner and Special Judge, Thiruvananthapuram. He was the Inspector attached to District Co-operative Bank, Pathanamthitta. He was prosecuted along with 6 others, by the Deputy Superintendent of Police Vigilance and Anti Corruption Bureau, Pathanamthitta, alleging offence under Section 13(2) r/w 13(1) (c) and (d) of Prevention of Corruption Act (hereinafter referred to as PC Act) and Section 409, 468, 471 and 120B IPC. The prosecution case is that the appellant was working as the Inspector attached to District Co- operative Bank, Pathanamthitta. The District Co-operative Bank, Pathanamthitta has a Branch at Adoor, wherein PW5 was the Manager. Under the Adoor Branch, there is a Service Co-operative Bank (Primary Bank) by name Erath Service Co-operative Bank of which the first accused was the Cashier and Accountant, the second accused was the Secretary, the third accused was the President and accused 4 and 5 were the Sub Committee members and accused No.7 was the Agricultural Officer. The 1st accused is the brother-in-law of PW2 Rajan Nair. Late Krishnan Nair and Pankajakshi Amma are the father-in-law and mother-in-law of the 1st accused. Neither PW2 nor his parents had any rubber plantation. But in their name with wrong address, applications were filed for Long Term Rubber Plantation Loan (LTRP Loan). In the loan applications, some bogus properties were scheduled. Neither PW2 nor his parents applied. Signatures in the loan applications were also forged. Loan applications were forwarded to the Sub Committee by the 2nd accused as if genuine applications. Accused 3 to 5 endorsed false certificate certifying that they had verified the correctness of the particulars in the loan applications and satisfied its correctness including valuation of the property. Loan applications were placed before the Board of Directors with the recommendation of the Sub Committee and got passed. The 1st accused managed to get a mortgage deed executed by PW2 and his parents. The appellant, who was bound to verify the records, in pursuance to the conspiracy, didn't point out the irregularities and illegalities. He also recommended the loan. The 7th accused without even inspecting the property falsely certified the feasibility and utility of the loan. Thus got released Rs.1,90,185/- by various occasions by abusing the office, forging documents and using those forged documents as genuine and committed breach of trust and criminal misconduct and that they did so in pursuance to a criminal conspiracy.
2. The offences were disclosed in an enquiry conducted by the Asst. Registrar of Co-operative Societies (vide Ext.P1 report). The matter was reported to the vigilance and Anti Corruption Bureau, Pathananthitta. After a preliminary enquiry a case was registered. After due investigation, five final reports alleging offences u/s 13(2) r/w 13(1) (c) and (d) of PC Act and Sections 409, 468, 471 and 120B IPC were submitted before the trial court. The appellant was the sixth accused. The learned Judge took cognizance and issued process. Despite the coercive steps issued to the second accused he could not be apprehended. Hence, the case against him was split up and proceeded separately. The other accused were re-arrayed as accused one to six. Thus the appellant, who was the 6th accused in the charge sheet, was re-arrayed as the fifth accused. On appearance of the other accused including the appellant, they were furnished with the copies of the final reports and connected documents and then heard either side. Finding that there are materials to send the accused for trial, separate charges were framed for the said offences. When read over and explained they pleaded not guilty. Hence, they were sent for trial. Crl.M.P No.939/2009 was filed by the accused seeking order for joint trial. It was allowed and the cases were tried jointly. The evidence was recor
