Back
2025 Supreme(Online)(Kar) 28399
KARNATAKA HIGH COURT
V SRISHANANDA, J
SRI. N. SHIVANNA – Appellant
Versus
STATE BY HIGH COURT OF CENTRAL BUREAU OF INVESTIGATION/ACB, KARNATAKA – Respondent
CRIMINAL APPEAL NO. 1047 OF 2012|CRIMINAL APPEAL NO. 1154 OF 2012|SPL. C.C.No.195/2009
For the Appellants/Petitioners: SRI. R. SHAILESH KUMAR, SRI. C.H. JADHAV, SMT. M.GAYATHRI RAMASWAMY, SRI. V.K. NARAYANA SWAMY
For the Respondents: SRI. P. PRASANNA KUMAR
The court established that conspiracy and cheating under the IPC were proven, but failure to demonstrate illegal gratification led to acquittal under the Prevention of Corruption Act.
Headnote:(A) Indian Penal Code, 1860 - Section 120B and 420 - Prevention of Corruption Act, 1988 - Sections 13(1)(d) and 13(2) - Conviction for conspiracy and cheating in bank loans by abusing official position - Both accused sanctioned fake loans amounting to Rs.117.79 lakhs through fabricated documents. (Paras 1-43)
(B) Conspiracy - Active collusion and forgery establishing substantial loss to the bank and illicit gains for the accused.
Facts of the case:
The accused orchestrated a fraudulent scheme to disburse loans under the 'CAN Budget Loans' targeting employees of FCI, utilizing forged salary slips and benefiting others through illegitimate means. (Paras 2.1-2.10)
Findings of Court:
The court upheld the conviction under Sections 120B and 420 IPC, but acquitted the accused under the P.C. Act due to insufficient proof of illegal gratification. (Paras 41-42)
Issues: The court assessed the sufficiency of evidence for conspiracy and cheating versus the absence of proof for unauthorized gratifications. (Paras 20 and 41)
Ratio Decidendi: Evidence supporting the conspiracy was deemed sufficient, but the prosecution failed to establish a direct act of acceptance of illegal gratification, leading to acquittal under the P.C. Act. (Paras 40-41)
Result: Appeals allowed in part; convictions maintained for IPC violations, but acquitted under P.C. Act, and fines imposed in lieu of prison terms.
| Table of Content |
|---|
| 1. defense arguments contesting the conviction. (Para 9 , 10 , 11 , 12) |
| 2. legality of loan processing and conspiracy established. (Para 20 , 21 , 22) |
| 3. requirements for conviction under pc act not met. (Para 35 , 40) |
| 4. sentence modified; imprisonment set aside by enhancing fine. (Para 42 , 44) |
ORAL JUDGMENT
The appellants herein (accused Nos.1 and 2) have been convicted for the offences punishable under Sections 120B and 420 of the Indian Penal Code, 1860 (for brevity " IPC ") and under Sections 13 (1)(d) read with Section 13 (2) of the Prevention of Corruption Act, 1988 (hereinafter for brevity referred to as "P.C. Act") in Spl.C.C.No.195/2009 and sentenced to undergo simple imprisonment for a period of two years for the offence punishable under Section 120B of IPC , two years for the offence under Section 420 of IPC and one year imprisonment for the offence under Section 13 (1)(d) read with Section 13 (2) of P.C. Act, apart from imposing fine of Rs.50,000/- each for the offence under Section 120B of IPC , Rs.50,000/- each for the offence under Section 420 of IPC and Rs.25,000/- each for the offence under Section 13 (1)(d) read with Section 13 (2) of P.C. Act (totally Rs.1,25,000/- to each of accused No.1 and accused No.2) with default sentence for each of the offences.
2. Facts which are most essential for disposal of the present appeals as per the charge sheet materials are as under:
2.1. One Sri.S.S. Kamath, Deputy General Manager, Canara Bank, Disciplinary Action Cell, Circle Office, Bangalore, lodged a complaint with the CBI, contending that there were irregularities and illegalities committed in the disbursement of 'CAN Budget Loans'at Canara Bank, Corporate Consumer Finance Branch, Bangalore.
2.2. The complaint averments would reveal that, accused No.1 - N. Shivanna, working as Branch Manager, Canara Bank, Corporate Consumer Finance Branch (CCFB), Infantry Road, Bangalore, conspired with accused No.2 - N. Shivananjaiah, who was working as Officer (Advances) in the said Branch and with other accused persons, during the period from 17.08.2000 to 13.07.2004. One K. Vasudevan Namboothiri (accused No.3) was working as Assistant, Grade II Clerk, M/s. Food Corporation of India (FCI), Buffer Storage Complex, Whitefield, Bangalore and N. Eshwar (accused No.4), was a labourer in FCI. Pursuant to said conspiracy, there were 95 loans which were disbursed under the 'CAN Budget Loan Scheme' in the names of employees of M/s. FCI, having their office in Buffer Storage Complex, Whitefield, Bangalore.
2.3. Accused No.4 - N. Eshwar and others submitted 95 loan applications in the name of the employees of FCI and those applications were forged and the said applications were supported by inflated salary slips of the employees of FCI. Accused No.2 - Shivananjaiah appraised those loan applications. As a result, there was a sanction of Rs.117.79 lakhs by accused No.1 - N. Shivanna on six different dates. Loan proceeds were disbursed to the employees of FCI by way of Demand Drafts and thereafter, those Demand Drafts were encashed through M/s. Nanjundeshwara Credit Co-operative Society, Yeswanthpur, Bangalore, not by employees of FCI. 2.4. Accused No.5 - B.T. Sathyanarayana, who was running a Hotel, opposite to M/s FCI, had come into contact with large number of daily wage employees/ labourers and K. Vasudevan Namboothiri (accused No.3) and Eshwar (accused No.4) who was working as Ancillary Labourer in FCI were responsible for preparing the fake salary certificates of the alleged employees of the FCI and they joined their hands with accused Nos.1 and 2, in getting the loan disbursed.
2.5. The details of the loan to the tune of Rs.117.79 lakhs on different dates during the period from 24.12.2003 to 12.03.2004 are extracted herein below:
| Sl. No. | Loan Account No. | Date of Sanction | No.of Loans | Total Amount (in lakhs) |
| 1 | A/c.No.13936 to 13962 | 24.12.2003 | 27 | 27.55 |
| 2 | A/c.No.14082 to 14111 | 14.01.2004 | 30 | 34.82 |
| 3 | A/c.No.14171 to 14182 | 06.02.2004 | 12 | 17.45 |
| 4 | A/c.No.1423 | |||
