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.

1. These appeals are directed against the common final judgment and order dated 29.01.2008 passed by the High Court of Judicature, Andhra Pradesh at Hyderabad in Criminal Appeal Nos. 602 and 617 of 2001 respectively whereby the High Court while dismissing the appeals confirmed the order of conviction passed by the trial Court but reduced the sentence of rigorous imprisonment (RI) of two years to one year.

2. Brief facts:
(a) According to the prosecution, basing on reliable information, on 23.03.1995, the Inspector of Police, Special CBI, Visakhapatnam registered an FIR in Crime No. RC.03 (A) / 95 - VSP against Shri N.V. Subba Rao (A - 1), the then Branch Manager, Central Bank of India (in short 'the Bank'), Guntur, A.P and Shri Attur Prabhakar Hegde (A - 2), Proprietor of A.P. Enterprises, Guntur, A.P. for the commission of offence punishable under S.120 - B read with S.420 IPC and S.420, S.468 and S.471 read with S.468 and S.13(2) read with S.13(1)(d) of the Prevention of Corruption Act, 1988 (in short 'the P.C. Act.) alleging that A - 1 abused his official position as a public servant and entered into a criminal conspiracy with A - 2 and defrauded the Bank to the tune of Rs. 1.168 crores by sanctioning temporary over drafts and term loans to various individuals sponsored by A - 2.
(b) After completion of the investigation, the CBI, on 08.05.2000, filed charge sheet against both the accused persons in the Court of the Special Judge for CBI Cases at Visakhapatnam which was numbered as CC No. 8 of 1998. In the said charge sheet, it has been alleged that A - 1 while functioning as Branch Manager was instructed by his Controlling Officers to disburse loans to the employees of Railways and other organisations only after obtaining an undertaking from their employers (borrowers) that the monthly installment of repayment of loan will be deducted from their salaries as primary security and also to obtain a mortgage on the plots sold to the borrowers through M/s A.P. Enterprises. A - 1 fraudulently and dishonestly disbursed 494 loans of Rs. 10,000/- each to various railway employees amounting to Rs. 49,40,000/- and credited the proceeds to the account of A - 2 without obtaining the requisite undertaking from the employers and without proper security of monthly installments to be deducted from their salaries. Out of the above mentioned 494 borrowers, 45 persons have been identified by the prosecution. It also came to light that A - 2, after having received the proceeds of the above 45 borrowers, fraudulently and dishonestly did not get 45 plots registered in their names nor the borrowers get the loan amount from the Bank.
(c) The Special Judge for CBI cases, Visakhapatnam, by judgment and order dated 30.04.2001, sentenced A - 1 and A - 2 to undergo RI for a period of one year for the offence under S.120 - B of the Indian Penal Code, 1860 (in short 'the ') and to undergo RI for a period of 2 years alongwith a fine of Rs.5,000/-, in default, to further undergo simple imprisonment for 3 months for the offence punishable under S.420 of the . Further, A - 1 was sentenced to under go RI for 1 year alongwith a fine of Rs.2,000/-, in default, to further undergo simple imprisonment for 2 months for the offence punishable under S.13(1)(d) read with S.13(2) of the P.C. Act and also ordered that the sentences shall run concurrently.
(d) Against the said conviction and sentence, A - 1 and A - 2 filed Criminal Appeal Nos. 602 and 617 of 2001 respectively before the High Court of Andhra Pradesh at Hyderabad. By impugned judgment and order dated 29.01.2008, the High Court while dismissing the appeals confirmed the conviction passed by the trial Court but reduced the sentence of rigorous imprisonment (RI) of 2 years imposed under S.420 of the to 1 year considering the age of the accused.
(e) Being aggrieved, A - 1 and A - 2 preferred these appeals by way of special leave and leave was granted on 20.10.2008.

3. Heard Mr. Mukul Gupta, learned senior cou