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2025 Supreme(Online)(Mad) 60578
IN THE HIGH COURT OF JUDICATURE AT MADRAS
D.BHARATHA CHAKRAVARTHY, J
K.Kumar Deshraj – Appellant
Versus
State rep. by The Inspector of Police, CBI/ACB/Chennai.RC No.51(A)/2003/CBI/ACB/CHENNAI – Respondent
Crl.A.No.639 of 2014
For the Appellants/Petitioners: Mr.R.Rajarathinam, Senior Counsel, for Mr.A.M.Rahamath Ali
For the Respondents: Mr.N.Baaskaran, Special Public Prosecutor (CBI Cases)
Proving dishonesty and loss is essential for a conviction under the Indian Penal Code and Prevention of Corruption Act when accepting damaged currency notes; mere violation of rules alone does not establish criminal liability.
Headnote:(A) Indian Penal Code, 1860 - Section 420 - Prevention of Corruption Act, 1988 - Sections 13(1)(d) and 13(2) - Conviction and sentence for acceptance of deliberately cut notes and causing loss to Reserve Bank of India - Accused found guilty of cheating and corruption but ultimately acquitted on appeal due to lack of proven dishonesty or loss to the bank. (Paras 1, 20, 21)
(B) Criminal conspiracy - The elements of conspiracy must be established beyond reasonable doubt, particularly with respect to the dishonest intention of the accused. The absence of evidence linking the accused to fraudulent activities resulted in the setting aside of the conviction. (Paras 19, 21)
Facts of the case:
The appellant, an Assistant Treasurer at the Reserve Bank of India, was convicted for accepting damaged currency notes and causing a financial loss to the bank. Allegations involved conspiracy and misappropriation of funds using deliberately cut notes. (Paras 1, 3)
Findings of Court:
The appellant’s actions did not constitute a loss to the bank as established in evidence, leading the Court to conclude that the required dishonest intent had not been proven. (Paras 20, 21)
Issues: The primary issues were whether the appellant's actions demonstrated dishonesty and whether there was actual loss incurred by the bank due to the transactions in question. (Paras 20, 21)
Ratio Decidendi: The court emphasized the necessity of proving the elements of dishonesty and loss beyond reasonable doubt, which was not satisfactorily demonstrated in this case. The appeal court noted that mere acceptance of mutilated notes, if done without a dishonest intent, does not suffice to establish a conviction for cheating or corruption. (Paras 20, 21)
Result: Conviction and sentence set aside, and any fine amount paid ordered to be refunded. (Para 21)
| Table of Content |
|---|
| 1. overview of offences charged against the accused (Para 1 , 2 , 3) |
| 2. trial court's findings and acquittals (Para 4 , 5) |
| 3. arguments presented by both parties (Para 6 , 7) |
| 4. interpretation of rbi rules regarding note refunds (Para 12 , 13 , 14) |
| 5. analysis of alleged misconduct and evidence (Para 16 , 17 , 18) |
| 6. conclusion on dishonesty and conviction basis (Para 19 , 20) |
| 7. final decision on the appeal (Para 21) |
JUDGMENT
This Criminal Appeal challenges the judgment of the XI Additional City Civil and Sessions Judge (CBI Cases relating to Banks and Financial Institutions), Chennai – 600 001, dated 21.01.2014 in C.C.No.27 of 2005. In that case, four accused were tried in total. Accused Nos. 2 to 4 were acquitted of all charges. The first accused was also acquitted of the charges under Section 120B read with Section 4 20 of the Indian Penal Code and Section 13 (2) read with (1)(d) of the Prevention of Corruption Act, 1988 . However, the first accused, Kumar Deshraj, was found guilty of an offence under Section 4 20 of the and sentenced to undergo Rigorous Imprisonment for two years and to pay a fine of Rs.5,000/- and in default, to undergo Simple Imprisonment for three months. For an offence punishable under (2) read with (1)(d) of the , he was sentenced to Rigorous Imprisonment for two years and to pay a fine of Rs.10,000/-. In default of payment, he was to undergo Simple Imprisonment for six months.
2. On 14.11.2003, upon receiving reliable information, the Deputy Superintendent of Police, SPE:CBI:ACB, Chennai, registered this case. The information revealed that the seven accused individuals, all employed as Assistant Treasuries at the Reserve Bank of India, Chennai, were manning defective note counters during May and June 2003, daily between 10:00 A.M and 4:00 P.M. They were supposed to accept damaged or mutilated notes from customers or the public and, after verifying the damage, pay either the full, half, or no value, according to the Reserve Bank of India (Note Refund) Rules, 1975. However, it was found that while manning the counters, they received deliberately cut notes of higher denomination. Among the seven accused, they collected a total of 8257 notes, causing a loss of Rs.41,28,500/-. It appears that these seven accused conspired with unknown persons, listed as accused No.8 onwards, to commit the same. The allegation states that they misused a quarter of the deliberately cut currency notes of 500 rupee denomination, assembling these pieces into full 500 rupee notes, totaling Rs.6,82,083/-. They encashed these reconstructed notes and paid a sum of Rs.48,16,583/- to individuals entitled to receive this amount. By colluding with unknown persons, they gained wrongful profit.
3. Based on the said allegations, a case was registered in RC No.51(A)/2003/CBI/ACB/CHENNAI for offences under Section 120B read with Section 420 , and Section 13 (2) read with (1)(d) of the Prevention of Corruption Act, 1988 . P.W.17 completed the investigation and filed the Final Report, proposing that four accused be found guilty of the charges. Two Indian Bank officers, namely, the appellant Kumar Deshraj and K.Sakthi Kumar, both serving as Assistant Treasurers, were named as accused Nos.1 and 2. It was alleged that they conspired with private individuals, specifically the third accused Vijay Kumar Agarwal and the fourth accused S.Manickam. After the issuance of summons and the provision of copies, on 11.07.2007, the following charges were framed against the accused.
"Firstly, that you Sh.K.Kumar Deshraj (A1) and you Sh.K.Sakthi Kumar (A2) while working as Assistant Treasurers in the defective note counters of Reserve Bank of India, Chennai entered into criminal conspiracy with you Sh.Vijaya Kumar Agarwal (A3) and you Sh.S.Manickam (A4) at Chennai and other places during the year 2003 to cheat Reserve Bank of India, Chennai and in pursuance of the said criminal conspiracy you Sh.Vijaya Kumar Agarwal (A3) prepared deliberat
