Dismissed

Sri C R Rajendra Babu v. State by Cbi/Bs & Fc

Karnataka HC10 Jan 2017CRL.A/58/2010

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed an appeal filed by a former bank officer convicted of criminal breach of trust, cheating, and corruption involving fraud on Public Provident Fund accounts. The court upheld the trial court's conviction and sentencing.

What did the court decide?

Criminal appeal dismissed; conviction and sentence upheld; bail bond cancelled; suspension of sentence revoked.

Sri C R Rajendra Babu Vs State by Cbi/Bs & Fc — Corruption | Karnataka HC (2017)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 10^TH DAY OF JANUARY 2017

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BEFORE

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THE HON’BLE MR. JUSTICE ANAND BYRAREDDY

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CRIMINAL APPEAL No.58 OF 2010

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BETWEEN:

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Sri. C.R.Rajendra Babu, Son of Late C. Rangaswamy Naidu, Aged about 64 years, Residing at No.11, III Main Road, Horamavu Main Road, Banaswadi, Bangalore – 560 042.

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…APPELLANT

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(By Shri Kiran S. Javali, Advocate)

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AND:

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State by CBI/BS and FC, Bellary Road, Bangalore.

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…RESPONDENT

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(By Shri P. Prasanna Kumar, Special Public Prosecutor)

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This Criminal Appeal filed under Section 374(2) of the code of Criminal Procedure, 1973, by the advocate for the appellant praying to set aside the order of conviction and sentence dated 24.12.2009 passed by the XXI Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bangalore in Spl.C.C.No.61/2007 – convicting the appellant/accused for the offence punishable under Sections 409, 420, 467, 468, 471 and 477A of IPC and Section 13(2) read with 13(1)(c) and (d) of the Prevention of Corruption Act, 1988. 1) The appellant/accused is convicted and sentenced to undergo S.I. for nine years and shall pay a fine of Rs.2,00,000/and in default of payment of fine the appellant/accused shall undergo S.I. for two years - for the offence punishable under Section 409 of IPC. 2) The appellant/accused is convicted and sentenced to undergo S.I. for three years and shall pay a fine of Rs.1,00,000/- and in default of payment of fine the appellant/accused shall undergo S.I. for one year - for the offence punishable under Section 420 of IPC. 3) The appellant/accused is convicted and sentenced to undergo S.I. for seven years and shall also pay a fine of Rs.1,00,000/- and in default of payment of fine the appellant/accused shall undergo S.I. for one year - for the offences punishable under Section 467 of IPC. 4) The appellant/accused is convicted and sentenced to undergo S.I. for three years and shall also pay a fine of Rs.1,00,000/- and in default of payment of fine the appellant/accused shall undergo S.I. for one year - for the offence punishable under Section 468 of IPC. 5) The appellant/accused is convicted and sentenced to undergo S.I. for two years - for the offence punishable under Section 471 of IPC. 6) The appellant/accused is convicted and sentenced to undergo S.I. for five years and shall also pay a fine of Rs.1,00,000/- and in default of payment of fine shall undergo S.I. for one year - for the offence punishable under Section 477A of IPC., and the appellant/accused is convicted and sentenced to undergo S.I. for five years and shall also pay a fine

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of Rs.2,00,000/- and in default of payment of fine the appellant/accused shall undergo S.I. for two years - for the offence punishable under Sections 13(2) read with 13(1)(c)(d) of Prevention of Corruption Act, 1988. The substantive sentences shall run concurrently.

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This Criminal Appeal having been heard and reserved on 13.12.2016 and coming on for pronouncement of Judgment this day, the Court delivered the following:-

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J U D G M E N T

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The present appeal is preferred by the appellant against

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the judgment of conviction and sentence passed for offences punishable under Sections 409, 420, 467, 468, 471 and 477-A of the Indian Penal Code, 1860 (Hereinafter referred to as ‘the IPC’, for brevity) read with Sections 13 (1) (c) & (d) and Section 13 (2) of the Prevention of Corruption Act, 1988 (Hereinafter referred to as ‘the PC Act’, for brevity).

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The facts leading up to this case are that the respondent had registered a case against the appellant alleging that the appellant who was a former Deputy Manager of the Bangalore branch of the State Bank of Mysore, was said to be

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in charge of the Public Provident Fund Section as the Passing Officer, during the period 19.6.1991 and 29.07.1998. He was also said to be in charge of the “Current Account - PPF Collection", maintained at the branch as well as of the transactions in the PPF Accounts maintained at about 292 branches of the Bank, throughout India.

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It was stated that under the Scheme of the Public Provident Fund Act, 1968, members of the public would make contributions to the fund and thereby obtain Income tax rebate thereon. Withdrawals from the PPF Accounts are said to have been allowed on applications made by the subscribers. Before sanctioning the withdrawals, it was to be ensured by the concerned bank official that amount being withdrawn does not exceed 50% of the balance in the account. For payment of the amount, a receipt was to be obtained from the subscriber. Entries were to be made in the ledger folio of the accounts

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maintained at the branch as well as in the PPF passbooks under the authentication of the supervisory officials .

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One A. Alam Pasha is said to have lodged a complaint with the Vigilance Department of the Bank, disputing a certain payment of Rs.7.5 lakh made to him by the appellant and sought details of the purchaser of the Banker's cheque no. 37435 dated 23.12.1997 for Rs.2.50 lakh, issued by the Bangalore branch of the Bank in the name of the said Pasha. On verification, it was said to have been found that the said Banker’s cheque was found to have been issued by debiting the “Current Account - PPF Collection Account” from the account of one Abdul Latif, a minor. It was also said to have been revealed that the balance in the account was only Rs.4,627/-. The transfer debit voucher was said to have been seen and prepared by the appellant. The related transfer credit voucher for the issue of the Banker’s cheque was also said to have been prepared by the appellant. Significantly, no entry was said to

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have been found of the debit in the ledger folio of the above said PPF Account.

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On further verification, it was said to have been found that the appellant had during the period November 1995 to July 1998, fraudulently withdrawn funds from as many as 359 PPF Accounts amounting to over Rs.9.86 crore, while creating false and bogus debit and credit vouchers, without the knowledge and consent of the account holders. The details of the above bogus transactions were furnished along with the complaint.

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On the criminal proceedings having been initiated the appellant had pleaded not guilty and claimed to be tried. The prosecution had examined 18 witnesses and got exhibited numerous documents. The trial court had then framed the following points for its consideration :

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“1. Does prosecution prove that the accused while functioning as Deputy Manager of Accounts Division and Officer of Provident Fund Section of Bangalore Main Branch of State Bank of Mysore during the period between November 1995

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and October 1996 committed criminal breach of the trust in respect of provident fund account over which he had dominion, by fraudulently preparing the false transfer debit and credit vouches and obtaining Banker’s Cheque in the names of persons having vested interest in respect of the property to the tune of Rs.2,12,18,170/- and giving such Banker’s Cheques as short term hand loan and collecting the principal together with interest at 2% per month from such persons so as to constitute offence under Section 409 of IPC?

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Does prosecution further proves that accused dishonestly induced State Bank of Mysore Main Branch at Bangalore to deliver property belonging to it by misusing his official position in PPF Section as passing officer and further prepared the false transfer and debit and credit vouchers and obtained Banker’s Cheque from Banker’s Cheque issuing section of State Bank of Mysore, Main Branch, Bangalore in the name of different persons having vested interest for the amount of Rs.2,12,18,170/- and thereby committed offence punishable under Section 420 IPC?

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Does prosecution prove that during the said period accused forged certain documents purporting to be valuable securities i.e., transfer debit slip and credit vouchers and obtained Banker’s Cheques with dishonest and fraudulent intention of withdrawing the cash of Rs.2,12,18,170/- from Provident Fund of various account holders in State Bank of Mysore, Main Branch and thereby committed offence punishable under Section 467 IPC?

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Does prosecution further prove that accused dishonestly and fraudulently prepared false transfer debit slips as well as the credit vouchers in order to debit the current account of provident fund collection account held in PPF Section of State Bank of Mysore Main Branch, Bangalore in the names of several account holders like Rajashekar (A/c. No.357), R.G.Ramdas (A/c. 8557), K.R.Adisheshan (A/c. No.357), B. Padmini (A/c. No.2853), S.T.Savithri (A/c.No.2854), K.S.Somashekaraiah (A/c. No.1286), T.V.Chandrashekar Gupta (A/c. No.1994), M. Muninarayana (A/c.No.1995), and similar other persons, totally on 85 occasions and obtained Banker’s Cheques in the names of persons with

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vested interest, namely, K. Gajendra, K. Chethan, K. Girish, T.S.Karuppaiah, T.K.Vijaya, T.K.Sukshitha, D.R. Nagabhushan, N. Sudarshan, Lakshmi and various other persons intending that those forged credit vouchers and debit slips shall be used for the purpose of cheating and thereby committed offence under Section 468 IPC?

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Does prosecution further prove that accused fraudulently used certain documents as genuine, to wit, debit vouchers and credit vouchers and Banker’s Cheque issued by State Bank of Mysore Main Branch, Bangalore and also the entries made in the Withdrawal Long Book, Current Account, PPF Collection Account Long Book, Progressive Ledgers, Day Book, maintained in the State Bank of Mysore, Main Branch, Bangalore which he knew at the time he used them to be forged documents and thereby committed offence punishable under Section 471 of IPC?

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Does prosecution further prove that accused fraudulently and dishonestly falsified the books of accounts and made false entries in the Withdrawal Lon g Book, Progressive Ledgers and PPF Account, Current Account, PPF Collection

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Account, Day Book and other books maintained in State Bank of Mysore, Main Branch, Bangalore, relating to the withdrawal of provident fund amount pertaining to the account holders in the names of Rajashekar (A/c. No.8557), K.R.Adisheshan (A/c. No.357), B. Padmini (A/c. no.2853), S.T.Savithri (A/c. No.2854), K.S.Somashekaraiah (A/C. No.1286), T.V.Chandrashekar Guptha (A/c. No.1994), M. Muninarayana (A/c. No.1995), and similar several account holders so as to siphon off a total amount Rs.2,12,18,170/- and thereby committed offence punishable under Section 477 IPC?

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Does prosecution further prove that accused during the said period abused his official position to obtain the pecuniary advantage by misappropriating cash of Rs.2,12,18,170/- by fraudulent means as alleged so as to constitute offence under Section 13(1)(c) and (d) of Prevention of Corruption Act, 1988?

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Does prosecution further prove that accused being a public servant during the said period dishonestly and fraudulently misappropriated or converted to his own use the

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property entrusted to him as a public servant by forging debit vouchers and credit vouchers and withdrew the amount held in the accounts of different account holders to the tune of Rs.2,12,18,170/and obtained the Banker’s Cheques in the names of different persons and gave such cheques as short term hand loan to such person charging them interest at the rate of 2% per month and collected principal and interest in cash from them and thereby committed offence punishable under Section 13(2) read with 13(1)(c) and (d) of Prevention of Corruption Act, 1988?

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9. What order?”

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The trial court had answered the same in the affirmative

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and convicted the appellant and has sentenced him to undergo simple imprisonment for nine years and pay a fine of Rs.2.00 lakh for the offence punishable under Section 409 IPC; to undergo simple imprisonment for three years and to pay a fine of Rs.1.00 lakh for the offence punishable under Section 420 IPC; to undergo a simple imprisonment for seven years and to

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pay a fine of Rs.1.00 lakh for the offence punishable under Section 467 IPC; to undergo simple imprisonment for three years and to pay a fine of Rs.1.00 lakh for the offence punishable under Section 468 IPC; to undergo simple imprisonment for two years for the offence punishable under Section 471 IPC; to undergo simple imprisonment for five years and to pay a fine of Rs.1.00 lakh for the offence punishable under Section 477A; to undergo simple imprisonment of five years and to pay a fine of Rs.2.00 lakh for the offence punishable under Section 13(2) read with Section 13(1)(c) and (d) of the PC Act, with a clause that the period of detention shall be given set off against the period of sentences of imprisonment under Section 428 Cr.P.C. and that the above sentences shall run concurrently.

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It is this which is under challenge in the above appeal.

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The learned counsel Shri Kiran Javali appearing for

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the appellant would contend that the court below has failed to appreciate the several pleas raised in defence and that the same

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has resulted in a miscarriage of justice. It is pointed out that none of the witnesses, particularly the witnesses in whose favour cheques and pay orders were alleged to have been issued, had not sought to bring on record any documentary evidence to support the allegation and hence the same could never have been relied upon as the basis for conviction. It is asserted that the prosecution has not chosen to examine material witnesses such as officials of the C & I Section, where the alleged fraud is said to have been detected. That Alam Pasha, at whose instance the entire episode came to light had not been examined as a witness. Nor were any of the account holders whose monies had been siphoned, examined as witnesses.

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It is asserted that the primary allegation of an offence punishable under Section 409 of the IPC was not attracted, as none of the ingredients envisaged therein were on record, as the appellant never could be said to have had domain over the property in question. It is contended that the trial court has overlooked this aspect.

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It is contended that the prosecution had not examined any witness to establish the issuance of a Banker's cheque allegedly based on a bogus transfer debit voucher and therefore the alleged act of having defrauded any person did not stand established and hence the conviction under Section 409 read with Section 420 of the IPC is not sustainable.

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It is pointed out that the evidence of PW-5, the investigating officer was completely inconsistent and contradictory to the evidence of PW-1 and in the face of which it is inexplicable that the trial court has recorded an order of conviction.

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The learned counsel hence seeks that the impugned judgment be set aside.

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On the other hand the learned counsel for the respondent seeks to justify the findings of the trial court.

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On a consideration of the rival contentions and a close perusal of the record, the following scenario emerges. The

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witnesses examined as PW-1 to PW-5 and PW-16 are officials of the State Bank of Mysore. PW-6 to PW-15 are the persons to whom the appellant is said to have lent the monies obtained by the fraudulent transactions.

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PW-1 who had worked as the Chief Manager in the Accounts Section of SBM, Main Branch, Bangalore had testified about the PPF Scheme. Elaborating on the procedure for withdrawal of amounts from the PPF Account by an account holder, it was stated that an application in Form-C was required to be submitted. The receiving clerk would verify with reference to the pass book of the applicant, his eligibility for withdrawal. The Passing Officer would then instruct the clerk to prepare a Transfer debit voucher and an application for issuance of a Banker's cheque. The Officer would authorize the withdrawal by affixing his signature. It would then be sent to the C & I Division for the issuance of the Banker's cheque. The cheque would be routed back to the Passing Officer who would acknowledge receipt. There is a PPF withdrawal Register

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maintained, in which the signature of the applicant is obtained and the Banker's cheque is issued to the applicant. It was stated that the Bangalore branch is a focal point branch, namely, that it is a branch to which transfer is made of all amounts collected in other branches of SBM - authorized to deal with PPF Accounts, in the form of credit and debit advices. It maintains collective account of all other branches so dealing with PPF Accounts. The difference of credit and debit advices of each day are sent to the SBM, Connaught Place Branch, New Delhi and from there credit advice is given to the RBI.

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The witness has further stated that a Banker's cheque dated 23.12.1997 for a sum of Rs.2.50 lakh was issued in favour of one Alam Pasha, the corresponding account stood in the name of Abdul Latif, a minor. The said amount was not shown as debited to PPF account of Abdul Latif. This is said to have been noticed by a Manager of the Vigilance Department at the Head office. On further verification, it was found that there were about 358 fictitious debits, which were not debited to the

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respective accounts but the Banker's cheques were issued and such withdrawals were made during 1995 to 1998. The appellant as Deputy Manager had been heading the PPF Section during the said period. The witness had adverted to transfer debit vouchers, ledger extracts, applications for banker's cheques and the witness had identified the appellant's signatures in the relevant documents. The witness has drawn attention to the deliberate omission on the part of the appellant to make entries regarding partial withdrawal of the PPF amounts in the PPF withdrawal register, despite the fact of issuance of banker's cheques. He had also drawn attention to the PPF Progressive register, where the total PPF transaction of each day are entered and the entries made in the said register are reflected in the focal point collection account. And the fact that the resultant balance from the focal point collection account would be transferred to the nodal office at New Delhi.

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The evidence of PW-1 was also to the effect that the withdrawals indicated only 50% from the PPF Account and

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some transactions indicated transfers from branch to branch.

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The name of the transferee branch to which account is transferred is not written in the Transfer Debit. It is found that in none of the cases Form-C was given for withdrawing the amount. There was no specific request from any of the account holders. The ledger did not reflect any entry regarding transfer debits. The evidence of this witness has satisfactorily established that the transactions covered under numerous documents do not reflect the relevant PPF withdrawal Register.

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The applications for Banker's cheques, which were exhibited, were all made in the names of persons other than PPF Account holders, the same were illegal and unauthorized- since they were drawn in favour of persons other than account holders. Similarly, the transfer debits are seen to have been created in the names of persons other than PPF account holders. The same are seen to bear PPF account numbers belonging to persons other than those mentioned therein. It was thus evident

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that manipulation was made using the existing PPF account numbers in order to conceal the fraud.

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The evidence of PW-1 is consistently supported by the testimony of PW-2 to PW-5 & PW-16.

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PW-6 to PW-15 have candidly revealed that they never had a PPF account in the concerned branch of the Bank. They had also not borrowed any loan from the bank. But it was their uniform revelation that the appellant was lending money to them on interest of 2-3% per month and that on moneys so lent, he was collecting at least three months’ interest in advance. The repayment was always said to have been made in cash.

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It is on a detailed discussion of the manner in which the appellant had committed fraud and made illegal gain, with reference to material documents, that the court below has held that the prosecution had proved the charges beyond all reasonable doubt. The reasoning of the court below cannot be faulted.

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Though it is contended that the prosecution ought to

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have examined other witnesses or that the case ought to have been proved in some other fashion as suggested, the overwhelming material already on record is more than adequate to justify the findings of the court below. Consequently there is no merit in this appeal and the same stands dismissed. The bail bond furnished stands cancelled. The order of suspension of sentence stands revoked.

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Sd/JUDGE

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KS*

Sri C R Rajendra Babu v. State by Cbi/Bs & Fc

Case brief

What is this about?

What did the court decide?

Sri C R Rajendra Babu v. State by Cbi/Bs & Fc

Case brief

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What did the court decide?

What the court decided

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