Madhusudanan vs State Represented by Deputy Superintendent of Police, Central Bureau of Investigation, Banking Security and Fraud Cell, Bangalore

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(Mad) 495

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. Nirmal Kumar, J.
Madhusudanan & Others – Appellant
Versus
State Represented by Deputy Superintendent of Police, Central Bureau of Investigation, Banking Security and Fraud Cell, Bangalore – Respondent
CRL.A. Nos. 357, 348 & 358 of 2009
Decided On : 07-07-2020

Advocate Appeared:
For the Appellant :R. Shanmugavelayutham, Senior Counsel, K.J. Parthasarathy, S. Rajasekar, S. Sadasharam, Advocates.
For the Respondent: K. Srinivasan, Special Public Prosecutor

Headnote:
PREVENTION OF CORRUPTION ACT - SECTION 13(2) R/W 13(1)(D) - SANCTION FOR PROSECUTION - VALIDITY - SANCTIONING AUTHORITY - COMPETENCY - GENERAL MANAGER OR CHIEF REGIONAL MANAGER - SCOPE OF SECTION 65 OF THE EVIDENCE ACT - FORGED DOCUMENTS - PROOF - CIRCUMSTANTIAL EVIDENCE - SUFFICIENCY - CONVICTION - SUSTAINABILITY.
Fact of the Case:

The appellants were convicted under various provisions of the Prevention of Corruption Act, 1988, and the Indian Penal Code for their involvement in a conspiracy to cheat the Bank of India, Purasawalkam Branch, Chennai, by dishonestly and fraudulently using forged documents, misrepresenting facts, and furnishing false information while applying for and sanctioning Export Credit Packing Facilities (ECPC) and Foreign Bill Purchase (FBP) facilities. The prosecution alleged that the appellants had entered into a criminal conspiracy to misuse the loan sanctioned for purposes other than those for which it was sanctioned, causing a loss of Rs. 2.37 crores to the bank.
Finding of the Court:

The High Court set aside the conviction and sentence imposed on the appellants by the trial court. The court held that the sanction for prosecution issued by the Chief Regional Manager, Bank of India, Madurai Region, was not valid as he was not the competent authority to grant such sanction. The court also found that the prosecution had failed to prove beyond reasonable doubt that the appellants had forged any documents or that they had conspired to cheat the bank. The court noted that the circumstances relied upon by the prosecution were not of a conclusive nature and did not lead to the irresistible conclusion that the appellants were guilty of the offenses charged.
Issues: 1. Whether the Chief Regional Manager, Bank of India, Madurai Region, was the competent authority to grant sanction for prosecution under Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988? 2. Whether the prosecution had proved beyond reasonable doubt that the appellants had forged any documents or that they had conspired to cheat the bank?
Ratio Decidendi: 1. The court held that the Chief Regional Manager, Bank of India, Madurai Region, was not the competent authority to grant sanction for prosecution under Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988. The court noted that the sanctioning authority must be the appointing authority or the removing authority, and that the Chief Regional Manager was subordinate to the General Manager, who was the appointing authority. The court also noted that the sanction order did not mention the crime number or the details of the investigation, and that the sanctioning authority had not independently applied his mind to the facts of the case. 2. The court held that the prosecution had failed to prove beyond reasonable doubt that the appellants had forged any documents or that they had conspired to cheat the bank. The court noted that the circumstances relied upon by the prosecution were not of a conclusive nature and did not lead to the irresistible conclusion that the appellants were guilty of the offenses charged. The court also noted that the prosecution had failed to produce the original documents that were alleged to have been forged, and that the evidence of the handwriting expert was not conclusive.
Final Decision: The High Court set aside the conviction and sentence imposed on the appellants by the trial court.

JUDGMENT :

(Common Prayer in C.A.Nos.357 & 358 of 2009: Criminal Appeals filed under Section 374(2) of the Code of Criminal Procedure, to set aside the conviction and sentence imposed on the appellant in C.C.No.60 of 2000 on the file of the learned XI Additional Special Judge for CBI Cases, Chennai-600 001, dated 09.06.2009.

C.A.No.348 of 2009: Criminal Appeal filed under Section 374(2) of the Code of Criminal Procedure, to set aside the order of conviction dated 09.06.2009 passed in C.C.No.60 of 2000 on the file of the learned XI Additional Judge for CBI Cases, Chennai and acquit the appellant.)

1. The appellant in C.A.No.348 of 2009 is A1 and the appellant in C.A.No.357 of 2009 is A3 and the appellants in C.A.No.358 of 2009 are A2 and A4. These appeals are arise out of the conviction and sentence rendered by the learned XI Additional Judge (CBI Cases relating to Banks and Financial Institutions), Chennai in C.C.No.60 of 2000 dated 09.06.2009.

2. The conviction and sentence of the trial Court are as follows:-

Appellant/Accused	Conviction and Sentence
A1	Convicted under Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 and sentenced to undergo Rigorous Imprisonment for three years and to pay a fine of Rs.1,00,000/-, in default to undergo Rigorous Imprisonment for six months.
A2	Convicted under Section 420, 468, 468 r/w 471 IPC each and sentenced to undergo Rigorous Imprisonment for three years and to pay a fine of Rs.50,000/-, in default to undergo Rigorous Imprisonment for six months.
A3	Convicted under Section 420 IPC and sentenced to undergo Rigorous Imprisonment for three years and to pay a fine of Rs.50,000/-, in default, to undergo Rigorous Imprisonment for six months.
A4	Convicted under Section 120-B r/w 420, 468, 468 r/w 471 IPC and Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 and to pay a fine of Rs.50,000/-.

3. Since all the appeals arise out of the Judgment in C.C.No.60 of 2000, this Court disposes all the appeals by way of Common Judgment. For the sake of clarity, the appellants are referred as, according to their ranks, as mentioned in the charge.

4. The case of the prosecution in a nutshell as follows:-

(i) On reliable information, the Superintendent of Police, CBI, BS & FC, Bangalore registered an FIR [Ex.P221] and entrusted the investigation to H.S.Chopra, Deputy Superintendent of Police, CBI, BS & FC, Bangalore who conducted search in the premises of A1 to A3 and also their lockers. The search was conducted by one Prema logan, the Inspector of Police, CBI, BS & FC, Bangalore and thereafter, further investigation was conducted by B.L.Singad/PW36. During the period between 1993 and 1994, A1 to A4 had entered into a criminal conspiracy to cheat the Bank of India, Purasawalkam Branch, Chennai by dishonestly and fraudulently using forged documents, misrepresenting facts, furnishing false information’s while applying, sanctioning, recommending, withdrawing the Export Credit Packing Facilities (ECPC) and Foreign Bill Purchase (FBP), which was not properly scrutinized by A1, who forwarded and recommended for sanction by the Industrial Finance Branch (IFB) and got proposal sanctioned. The Export Credit Packing Facility (ECPC) and Foreign Bill Purchase (FPB) facility was granted to M/s.Vindia Exports Private Limited, Chennai/A4. A2 to A3 are its Directors. A1 is the Branch Manager of Bank of India, Purasawalkam Branch, Chennai.

(ii) A1 has granted loan facilities by way of ECPC and FBP negotiation facilities for Rs.15 lakhs in favour of M/s.Valley Exporters, No.44, Nowriji Road, Chennai, in which A2 was its Proprietor. A4 was granted ECPC facilities for a sum of Rs.1.25 crores in favour of M/s.Vindia Exporters Private Limited, Chennai. A1 in pursuance to the conspiracy by abusing his official position as Public Ser

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2020 Supreme(Mad) 495

Cases Referred (11)