Intention to cheat must exist from the outset for a conviction under IPC Section 420; absence of deceitful intent and no pecuniary advantage mandated an acquittal.

JUDGMENT :

A.BADHARUDEEN, J.

Dated this the 16^th day of February, 2026 Accused Nos.1 and 2 in C.C.No.39/2014 on the files of the Special Judge-III, CBI/SPE, Ernakulam, have filed these appeals challenging the verdict in the above case, dated 31.08.2016, whereby accused Nos.1 and 2 were found guilty for the offences punishable under Sections 120B r/w 420 of the Indian Penal Code (for short, 'the IPC' hereinafter) as well as under Section 13 (1)(d) r/w 13(2) of the Prevention of Corruption Act, 1988 (for short, 'the PC Act, 1988' hereinafter).

2. Heard the learned counsel for the appellants/accused Nos.1 and 2 and the learned Special Public Prosecutor appearing for CBI.

3. The case of the prosecution is that the 1^st accused, while officiating as Senior Manager, Union Bank of India, Kattappana Branch, Idukki District, during the period from 17.05.2004 to 07.05.2005, conspired with accused Nos.2 to 6 with the intention of cheating Union Bank of India, Kattappana Branch, by sanctioning and disbursing housing loans while abusing his official position. In pursuance of the conspiracy, the 1^st accused, in violation of banking norms, sanctioned five housing loans amounting to Rs. 50 lakh, viz., Rs. 10 lakh in the name of the 2^nd accused on 29.12.2004; Rs. 10 lakh in the name of the 3^rd accused on 02.09.2004; Rs. 10 lakh in the name of the 4^th accused on 14.07.2004; Rs. 10 lakh in the name of the 5^th accused on 03.09.2004; and Rs. 10 lakh in the name of the 6^th accused (who is the wife of the 2^nd accused) on 26.02.2005, on the basis of false and bogus documents. The 1^st accused disbursed the amounts without conducting any pre or post sanction inspection, fully knowing that the amounts would not be used for construction of any house and would be applied to purposes other than those for which they were sanctioned. The 1^st accused allowed the 2^nd accused to utilise the amount for purchasing a cardamom estate in the name of the 2^nd accused. Accused Nos.2 to 6 dishonestly induced the Bank to sanction the loans on the basis of false and bogus documents and got the amounts released, knowing well that they were not required for construction and would be used for other purposes. On this premise, the prosecution alleges commission of the above offences by the accused.

4. The Special Court recorded evidence after framing charge as against accused Nos.1 to 6. PW1 to PW14 were examined and Exts.P1 to P65 were marked on the side of the prosecution. DW1 to DW3 were examined and Exts.D1 to D10 were marked on the side of the defence.

5. On appreciation of the evidence, the learned Special Judge found commission of offences punishable under Sections 120B r/w 420 of the IPC as well as under Section 13 (1)(d) r/w 13(2) of the PC Act, 1988, by accused Nos.1 and 2, while acquitting accused Nos.3 to 6. Accordingly, accused Nos.1 and 2 were sentenced as under:

i. A1 is sentenced to undergo Rigorous Imprisonment for one year and to pay fine of Rs.10,000/- in default to undergo Simple Imprisonment for three months u/s. 13(2) of the PC Act and Rigorous Imprisonment for one year and to pay fine of Rs.10,000/- in default to undergo Simple Imprisonment for three months u/s.420 IPC. Regarding the conspiracy, A1 is sentenced to undergo Rigorous Imprisonment for one year each u/s.120 B r/w 420 IPC and 120 B r/w. S.13(2) of PC Act.

ii. Accused No.2 is sentenced to undergo Rigorous Imprisonment for one year and to pay fine of Rs.10,000/- in default to undergo Simple Imprisonment for three months each u/s. 420 IPC. Further, he is sentenced to undergo Rigorous Imprisonment for one year each for the offences u/s. 120B r/w. S.420 IPC and 120B r/w 13(2) of PC Act.

iii. The substantive sentence of imprisonment shall run concurrently.

iv. The accused are entitled to set off of the period o