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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K.K. RAMAKRISHNAN, J.
K. Rajaraman - Appellant
Versus
The State - Respondent
Crl. Appeal (MD) Nos. 154, 163, 164 of 2020
Decided On : 04-03-2025
| Table of Content |
|---|
| 1. accused convicted for bank fraud. (Para 1 , 2 , 3) |
| 2. appellants argue against charges. (Para 4 , 5 , 6) |
| 3. court analyzes supporting evidence. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 4. legal findings on prosecution’s case. (Para 16 , 23) |
| 5. court's findings on evidence and procedural violations. (Para 17) |
| 6. court's final judgment and sentencing outcomes. (Para 24 , 25 , 26 , 27 , 28 , 29 , 30) |
JUDGMENT :
1. The accused No.1 to 3 in C.C.NO.2 of 2011, on the file of the II Additional District Court(CBI Cases) Madurai, have preferred these appeals challenging the following conviction and sentence imposed against them, vide the impugned judgment dated 12.03.2020:-
| Crl.A. (MD). No. | Rank of the Accused and Name | C.C. No. | Charges proved under sections | Punishment (Imprisonment and Fine) |
| 154 of 2020 | A-1 K.Rajaraman | 2 of 2011 | U/s.120-B r/w 420 IPC | Sentenced to undergo Rigorous Imprisonment for fours years and to pay a fine of Rs.1,25,000/- in default to undergo Simple Imprisonment for Six months. |
| U/s.420 of IPC | Sentenced to undergo Rigorous Imprisonment for three years and to pay a fine of Rs.75,000/- in default to undergo Simple Imprisonment for Six months. | |||
| 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 | Sentenced to undergo Rigorous Imprisonment for two years and to pay a fine of Rs.50,000/- in default to undergo Simple Imprisonment for Six months. | |||
| 163 of 2020 | A-3 R.Rajasekar | U/s.120-B r/w 420 IPC | Sentenced to undergo Rigorous Imprisonment for five years and to pay a fine of Rs.1,25,000/- in default to undergo Simple Imprisonment for Six months. | |
| U/s.420 of IPC | Sentenced to undergo Rigorous Imprisonment for three years and to pay a fine of Rs.75,000/- in default to undergo Simple Imprisonment for Six months. | |||
| 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 | Sentenced to undergo Rigorous Imprisonment for three years and to pay a fine of Rs.75,000/- in default to undergo Simple Imprisonment for Six months. | |||
| 164 of 2020 | A2 | U/s.120-B r/w 420 IPC | Sentenced to undergo Rigorous Imprisonment for five years and to pay a fine of Rs.5,00,000/- in default to undergo Simple Imprisonment for Six months. | |
| U/s.420 of IPC | Sentenced to undergo Rigorous Imprisonment for three years and to pay a fine of Rs.2,00,000/- in default to undergo Simple Imprisonment for Six months. |
2. The brief facts of the case:-
When the appellants in Crl.A.(MD).Nos.154 and 163 of 2020, were working as managers of the Indian Overseas Bank, Thiruvanaikovil Branch, Tiruchirapalli, during the period from 23.06.2003 to 12.02.2006, they had entered into conspiracy with the private individual namely the appellant in Crl.A.(MD)No.164 of 2020, to cheat the Indian Overseas Bank and defraud an amount of Rs.2,02,42,674/- and granted loan to the following agencies managed by A2: i.M/s. Vasan News and Advertising ii.M/s. Vasan Canteen service iii.M/s.Vasan Catering Services iv.Hotel Mani vilas unit – I v.Hotel Mani Vilas unit - II Totally, seven loans were granted to the above said agencies without obtaining registered mortgage deed and sufficient securities and diverted the loan amount for some other purpose other than the purpose for which the loan was granted and therefore, caused loss of Rs.2,02,42,674/-and acted contrary to the banking norms and regional office instructions. Therefore, the CBI registered the case under Sections 120(b) r/w 420 of IPC r/w 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988, against number of persons and after the investigation, CBI filed the final report against the appellants for the above said offences before the II Additional District Court(CBI Cases) Madurai, and the same was taken on file in C.C.No.2 of 2011. After taking cognizance, in C.C.No.2 of 2011, the learned special Judge issued summons to the accused and on their appearance, served the copies under Section 207 Cr.P.C. Thereafter, framed the appropriate charges and questioned the appellants and they pleaded not guilty and they stood for trial.
3. To prove the charge framed against the appella
The case establishes that bank officials can be charged with conspiracy and cheating for failing to adhere to loan granting procedures, leading to significant financial losses to the institution.
Convictions confirmed despite appeals; conspiracies in financial fraud established through corroborated evidence, with sentences mitigated based on health conditions.
The court affirmed that individuals involved in facilitating loans under fraudulent circumstances can be held accountable, reflecting the principle of personal culpability in conspiracy and fraud off....
The conduct of the appellants constituted a criminal conspiracy and cheating, supported by substantial evidence of fraudulent loan disbursement and failure to comply with banking regulations.
The validity of sanction for prosecution is crucial, requiring the sanctioning authority to independently assess allegations and evidence, failing which proceedings are deemed null.
The main legal point established in the judgment is the requirement of sufficient evidence to prove dishonesty and overestimation of property value in cases of conspiracy to cheat a bank.
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.
The court reaffirmed that misappropriation of loan funds constitutes a criminal offense regardless of subsequent recovery through civil actions.
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