The case reaffirmed that issuing insurance endorsements without verifying risk conditions and following legal protocols can constitute criminal conspiracy and fraud under IPC and PC Act.

JUDGMENT :

A. BADHARUDEEN, J.

1. Accused Nos.1 and 3 in C.C.No.03/1999 on the files of the Special Court, (SPE/CBI)-II, Ernakulam are the appellants herein and they impugn the conviction and sentence imposed against them, as per judgment dated 01.06.2010.

2. Heard the learned counsel for the appellants/accused Nos.1 and 3 as well as the learned Special Public Prosecutor. Perused the judgment under challenge.

3. In this matter, the prosecution alleges commission of offences punishable under Section 120B r/w Section 420 of the INDIAN PENAL CODE (for short, ‘the IPC’ hereinafter), and Section 13 (1)(d) of the Prevention of Corruption Act, 1988 (for short ‘the PC Act, 1988’ hereinafter), and (2) r/w Section 15 of the PC Act, 1988, as well as under Section 420 r/w Section 511 of the IPC, by the accused. The prosecution case is that the 1^st accused, who was employed as Assistant Branch Manager, New India Assurance Company Ltd., Kalpetta Branch, from 30.08.1990 to 30.12.1996, hatched a criminal conspiracy with the 3^rd accused during the period from 29.07.1994 to 30.07.1994 to cheat the New India Assurance Company Ltd. in relation to insurance claims and to obtain pecuniary advantage for the 2^nd accused, Assam Brooks Exports Ltd., 1 Sheksphere Sarani, Calcutta, represented by Sri.Sidharth Rampuria, Director - a company engaged in the purchase, sale and export of tea and having a branch office at Willingdon Island, Cochin and to commit criminal misconduct. According to the prosecution, the conspiracy was formed with a view to misappropriate the funds of the insurance company in the names of accused Nos.2 and 3 by fraudulently inserting endorsements in the insurance policies taken by accused Nos.2 and 3, thereby covering FST risk after making such illegal endorsements.

4. The Special Court ventured the matter. PW1 to PW31 were examined and Exts.P1 to P75 and MO1 were marked on the side of the prosecution. Exts.D1 to D47 were marked on the side of the defence.

5. On analysis of the evidence, the Special Court found that the accused Nos.1 and 3 committed offences punishable under Section 120B r/w Section 420 of the IPC as well as under Section 13 (1)(d) of the PC Act, 1988. Further, the 1^st accused also committed offence punishable under (2) r/w Section 15 of the PC Act, 1988. The 3^rd accused also committed offence punishable under Section 420 r/w Section 511 of the IPC. Accordingly, accused Nos.1 to 3 were sentenced as under:

“A1 and A3 are sentenced to undergo Sl for six months and A2 company to pay a fine of Rs.10,000/- (Rupees ten thousand only) for the offence punishable under Sections 120(B) IPC read with Section 420 IPC and Section 13 (1)(d) of the P.C Act. A1 is sentenced to undergo SI for one year and to pay fine of Rs.10,000/- (Rupees ten thousand only) with default sentence of three months for the offence under (2) read with Section 15 PC Act. A3 is sentenced to undergo SI for one year and to pay fine of Rs.10,000/- (Rupees ten thousand only) with default sentence of three months and A2 is sentenced to pay fine of Rs. 15,000/-(Rupees fifteen thousand only) for the offence under Section 420 read with Section 511 IPC. It is enough if A1 and A3 suffer the substantive sentence of imprisonment concurrently.”

6. While assailing the conviction and sentence, the learned counsel for the 1^st accused argued that the 1^st accused, who was the Branch Manager of the New India Assurance Company Ltd., Kalpetta Branch, was unfairly blamed for the wrong committed by the higher officials. It is further contended that the 2^nd accused - Company had filed a civil suit claiming the amounts covered by Exts.P2 and P3 policies, to which, Exts.P5 an