Dismissed

Ranjith Kothari v. the Inspector of Police

Madras HC5 Apr 2018CRL A/462/2006

Case brief

AI extract

What is this about?

Appeals against conviction for cheating and criminal conspiracy arising from unauthorized cash withdrawals via debit slips. The High Court held that allowing a third party to operate an account without written authorization is illegal and affirmed the conviction.

What did the court decide?

The criminal appeals are dismissed and the conviction and sentence of the trial court are confirmed.

Ranjith Kothari Vs the Inspector of Police — Corruption | Madras HC (2018)

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Bail Slip

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Crl.A.462/2005

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The Appellant herein/2^nd Accused viz Ranjith Kothari, S/o.Kannaiahlal Kothari, was directed to be released on bail as per order of this Court dt.30/05/2006 made in Crl.MP.3368/2006 in Crl.A.462/2006.

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Crl.A.487/2006

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The Appellant herein/1^st Accused viz K.V.Suresh, S/o.Vengappa, was directed to be released on bail as per order at this Court dt.6/6/2006 made in Crl.MP.No.3583 of 2006 in Crl.A.487/2006.

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Reserved on:13.03.2018 Pronounced on: 05.04.2018 Coram: The Honourable Dr.Justice G.Jayachandran Criminal Appeal Nos.462 & 487 of 2006 K.V.Suresh ...Appellant/1^st Accused in Crl.A.No.487 of 2006 Ranjith Kothari ...Appellant/2^nd Accused in Crl.A.No.462 of 2006 /versus/ State by The Inspector of Police, SPE/CBI/ACB/Chennai. ... Respondent/Complainant (R.C.No.42(A)/1999) in all the cases

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PRAYER: Criminal Appeals are filed under Section 374(2) of Criminal Procedure Code, against the conviction and sentence passed by the learned II Additional District Judge [CBI cases], at Coimbatore, dated 05.05.2006 made in C.C.No.12 of 2003 as against the Appellants/A-1 & A-2 respectively.

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For Appellant : Mr.V.Gopinath, Sr. Counsel in Crl.A.No.487 of 2006 for Mr.M.Balasubramanian For Appellant : Mr.A.R.L.Sundaresan, Sr. Counsel in Crl.A.No.462 of 2006 for Mr.Sugumar R.Rajulu For Respondent : Mr.K.Srinivasan in all the appeals Special Public Prosecutor [CBI]

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COMMON JUDGMENT

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Thiru. K.V.Suresh (A-1) and Thiru.Ranjith Kothari (A-2) have preferred these appeals against conviction and sentence passed in C.C.No.12 of 2003, dated 05.05.2003 on the file of II Additional District Judge (CBI cases) , Coimbatore.

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Brief facts of the case

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On 30.09.2003, based on reliable information Mr.Billi Christodass, Inspector of Police, CBI/ ACB/Chennai registered the first information report in Crime No.RC MA 1 1999 A 0042, against K.V.Suresh Branch Manager, Vijaya Bank, Coonoor Branch, Niligiris District to the effect that, K.V.Suresh during 1998– 1999 dishonestly and fraudulently withdrawn a sum of Rs 24.75 lakhs from the OLCC A/c No.36/1999 of M/s.Nimbus Industries Limited, and another sum of Rs 2.85 Lakhs from the OLCC A/c No.9/99 of M/s.New Sheeba Jewellery by fabricating bogus debit slips.

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K.V.Suresh [A1] being a public servant, as Branch Manager of the Nationalised bank, was found to have abused his official position and committed criminal breach of trust and cheated the Vijaya Bank to a tune of Rs.27.60 lakhs and caused wrongful loss to Vijaya Bank disclosing primafacie commission of offences punishable under section 406 and 420 IPC and section 13 (2) r/w 13(1) (d) of Prevention of Corruption Act, 1988.

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On completion of the investigation, Mr.Billi Christodass (PW-16) filed two final reports one against K.V.Suresh (A-1) Branch Manager and Ranjith Kothari [A-2] in respect of the fraudulent withdrawal of Rs.31,25,000/- from the current Account No.786 and OLCC Account No.36/98 of M/s.Nimbus Industries Ltd., through debit slips and another against K.V.Suresh (A-1) and Robin as A-2, in respect of fraudulent withdrawal of Rs.2,85,000/- from the OLCC No.9/99 of M/s.New Sheeba Jewellers without the knowledge of the said account holders and by corrupt or illegal means transferred the proceeds by the internal debit slips and made payment to Robin (A-2). The trial court took cognizance of the offences for trial in C.C 12/1999 and CC 13/1999.

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These two appeals arises from C.C.12 of 2003. The trial court based on the materials produced by the prosecution framed 3 charges. First, conspiracy charge against both the accused namely K.V.Suresh (A-1) and Ranjith Kothari (A-2) for offence under section 120-B I.P.C r/w 420 IPC and 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988. Second, substantive charge under section 420 IPC against A-1 and A-2 for cheating Vijaya Bank, for a sum of Rs.31,25,000/- through 11 debit slips and third, substantive charge under section 13(2)

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r/w 13 (1)(d) Prevention of Corruption Act, 1988 against A-1 for abusing his official position to obtain pecuniary advantage of Rs.31,25,000/- for A2.

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The gist of the charges framed is that, in furtherance of criminal conspiracy between A-1 [K.V.Suresh] and A-2 [Ranjith Kothari] dishonestly filed eleven debit slips for various amounts for withdrawing a sum of Rs.31,25,000/- from the Current Account No. 786 of M/s.Nimbus Industries Ltd., and from the account of Open Loan Credit Account (OLCC) No.36/98 of M/s.Nimbus Industries Ltd., K.V.Suresh (A-1) as Branch Manager of Vijaya Bank misusing and abusing his official position authorised A-2 [Ranjith Kothari] to withdraw the amounts found in the eleven debit slips without the knowledge of the concerned account holder. A-1 [K.V.Suresh] by corrupt and dishonest means transferred the proceeds of the internal debit slips and made cash payment to A-2 in violation of banking rules and procedures.

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The prosecution to prove the charges had examined 16 witnesses. 48 documents are marked as prosecution exhibits. For defence A-1 and A-2 examined as DW-1 and DW-2. The certificate copy of the statement of account of M/s Nimbus Industries is marked as defence exhibit.

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The trial court after considering the evidence of prosecution and the defence has held both the accused guilty of the charges framed and sentenced them as under:-

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K.V.Suresh (A-1) - to undergo one year RI and to pay fine of Rs.1,000/- in default to undergo 3 months RI for offence under section 120-B IPC r/w 420 IPC and section 13(2) r/w 13(1)(d) PC Act. To undergo one year RI and to pay fine of Rs.1,000/- in default to undergo 3 months RI for each offences under section 420 IPC (11 counts) and to undergo one year RI and to pay fine of Rs. 1000/- in default to undergo 3 months RI for offence under section 13(2) r/w 13(1) (d) of Prevention of Corruption Act, (11 counts). The total fine imposed is Rs.23,000/- The period of sentence ordered to run concurrently. Imprisonment period already undergone to be set off under section 428 Cr.P.C.

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Ranjith Kothari (A-2) - to undergo one year RI and to pay fine of Rs.1,000/- in default to undergo 3 months RI for offence under section 120B IPC r/w 420 IPC and section 13(2) r/w 13(1) (d) PC Act and to under go one year RI and to pay fine of Rs.1,000/- in default to undergo 3 months R.I for offence section 420 IPC (11 counts). The total fine imposed is Rs.12,000/-The period of sentence ordered to run concurrently. Imprisonment period already undergone to be set off under section 428 Cr.P.C.

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Contention of the appellants and respondent counsels:

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Aggrieved by the said judgment of conviction and sentence, these two appeals are preferred on the prime ground that though the account holder PW-9 [Sharma @ Viswanatha Sharma] had denied any authorisation to A-2 [Ranjith Kothari] for operating the account, the facts through Ex.D-1 would clearly show that the entire banking transaction of M/s.Nimbus Industries Ltd., was operated only by A-2 [Ranjith Kothari] and with the knowledge of PW-9 [Sharma @ Viswanatha Sharma]. That is the reason why PW-9 never complaint about unauthorised withdrawal. The trial court failed to see that M/s.Nimbus Industries Ltd., had cleared all its dues even before lodging of FIR against A-1 and A-2. Neither M/s.Nimbus Industries nor Vijaya Bank are the loser in these 11 transactions.

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As far as K.V.Suresh A1 appellant in Crl.A.No.487 of 2006 concern, being a public servant, he also questions the sanction for prosecution accorded by PW-1 [Jeyakar Shetty] on the ground of incompetency of PW.1 [Jeyakar Shetty]. According to the learned Senior Counsel appearing for this appellant. The accused being officer of Scale-III, the appointing authority is the Chairman and Managing Director of the Bank. PW-1 [Jeyakar Shetty] being Deputy General Manager is subordinate to the appointing authority. Therefore, he is not competent to accord sanction. Further the order of sanction accorded without application of mind.

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The learned Senior Counsels appearing on behalf of the appellants amplifying the grounds of appeal submitted that, the charges as framed by the trial court does not stand the scrutiny of law. The alleged transactions are within the permissible limit of banking practise. The money withdrawn from the account of M/s.Nimbus Industries Ltd., never been questioned by its account holder at any point of time. In fact, PW-9 admits his acquittance with A-2 [Ranjith Kothari]. It was A-2 [Ranjith Kothari] who was taking care of the M/s.Nimbus Industries Ltd., business at Coonoor till the company was sold. The Banking transaction was done only through A-2 [Ranjith Kothari] and the account was closed without any due. While so, there is no element of criminality proved to be available to prosecute the appellants much less to convict them.

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Per contra, the Learned Special Public Prosecutor submit that, the permission to withdraw cash through debit slips by A-1 is against the banking procedure. Only for internal account transactions debit slips are permitted. While so, A-1 has not only permitted cash withdrawal, but such withdrawals were admittedly made by A-2 who is not the account holder or authorised person to operate the account. The explanation and reasons given by the accused persons for such withdrawal are not genuine and the trial court has rightly held that, a sum of Rs.31,25,000/- had been fraudulently withdrawn from M/s.Nimbus

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Industries Ltd., account by A-2 in connivance with A-1. The finding of the trial court is based on evidence and sound reasoning, which does not requires any reconsideration. The finding of this court :

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The prosecution case as unfolded through the witnesses and relevant for the court of appeal are, from the account of M/s.Nimbus Industries Ltd., 11 debits slips marked as Exs.P-4, 7, 8, 11, 12, 14, 15, 16, 17, 19 and 21 were used to withdraw a total sum of Rs.31,25,000/-. Though under banking practice cash cannot be withdrawn through debit slips, the Branch Manager of Vijaya Bank, A-1 had allowed, A-2 to withdraw cash from the account using debit slips.

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PW-9 Mr.V.N.Sharma, one of the director of M/s.Nimbus Industries had deposed that, his uncle Umesh Dahima was taking care of the company business at Ooty. After the death of Umesh Dahima his son Chandrasekar Dahima was -----taking care of the business till it was sold to one Mr.Ravindiran in the year 1998. He changed the name of the company as M/s.Hill Mark (P) Ltd., Kothagiri. The Current Account No. 786 in Vijaya Bank, Coonoor Branch was operated by him and Chandrasekar Dhalmia. The day to day administration of the company was looked after by Chandrasekar Dahima. He has categorically deposed that the letter of guarantee Ex P-32 and promissory note for Rs.6,00,000/- Ex.P.33 were executed in favour of Vijaya Bank by him and it was signed by him alone when he handed over these two documents to the Branch Manager A-1. He has further deposed that he know Ranjith Kothari (A-2) as one of the dealer who used to supply tea leaves to his company. He has identified the signatures in the debit slips Exs.P-4, 7, 8, 11, 12, 14, 15, 16, 17, 19 and 21 shown to him, as the signatures of Ranjith Kothari [A-2] and had also deposed that in these debit notes neither he nor Chandrasekar Dahima had signed. Ranjith Kotari was not authorised to do anything regarding the company or to operate the account of M/s.Nimbus Industries Ltd. In the cross examination of PW-9 when it was suggested that Ranjith Kothari was the Joint Director of M/s.Nimbus Industries Ltd. PW-9 had denied the suggestion.

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Ranjith Kothari (A-2) had mounted the witness box and in his deposition admits the withdrawal of cash through 11 debit slips. According to him, M/s.Nimbus Industries Ltd., was not running profitably, so, he lend Rs.5 lakhs to V.N.Sharma and stood guarantee for the loan of V.N.Sharma. When the father of Chandrasekar Dahima fell ill, he took over the administration of M/s.Nimbus Industries Ltd. On telephonic instruction from V.N.Sharma and Chandrasekar Dahima to the bank, he was permitted to withdraw cash by debit slips. He had withdrawn money from the account of Nimbus Industries through cheques also. Since, he was administering the company, he had remitted cash into the account

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of Nimbus Industries on several occasions. The signatures found on the back of the debit slips are admitted by A-2. According to his evidence, he affixed signatures on the back of the debit slips since the bank staff in the cash counter told him to sign on it before disbursing cash.

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The branch manager K.V.Suresh (A-1) had been examined as DW-2. He in his evidence had justified his action of permitting the withdrawal of cash from the account of M/s.Nimbus Industries Ltd, by A-2 through debit slips on the ground that the bank transactions are audited twice a year, one by Controlling officer and another by Statutory Auditor. Both of them have not made any remark about the debit slips involved in this case. Even before, launching of prosecution, the account of M/s.Nimbus Industries Ltd., was closed and no due recoverable from that company. The certificate copy of the statement of account pertaining to M/s.Nimbus Industries Ltd., is marked as Ex.D-1. It is deposed by DW-2 that after withdrawal of cash through debit slips, Chandrasekar Dahima used to give cheques in support of the debit slips.

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The prosecution witnesses from Vijaya Bank had deposed about the banking procedure in case of debit slip withdrawal and when and who can authorise such withdrawals. It is spoken by PW3 that debit slips are used to transfer of fund from one account to another and not for withdrawal of cash from the customers account. Further, in this case the debit slip used for cash withdrawal is not by the account holder or with his knowledge but dishonestly filed by A-2 and allowed to withdraw by A-1.

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In the cross examination of PW-9, A-2 had suggested that he was joint director of M/s.Nimbus Industries Ltd., which is denied by PW-9. If the said suggestion is true, to support his suggestion made to the witness, A-2 ought to have produced document to the effect that he was appointed as Joint Director of M/s.Nimbus Industries Ltd., and was authorised to administer the bank accounts of M/s.Nimbus Industries Ltd., Contrarily, when he mounted the witness box to give evidence, he would say that, since he was taking care of the business, Mr. V.N.Sharma of M/s.Nimbus Industries Ltd., allowed him to operate the account. Over phone Sharma used to instruct the bank to deliver cash based on the debit slips. On Sharma's direction he withdrew cash using debit slips.

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The above admission of A-2 has to be looked in the light of the deposition of the first accused recorded as evidence of DW-2. While, A-1 would say that after clearing the debit slips, the account holder used to give cheques of those transaction, neither A-2 the person who withdrew the cash nor https://hcservices.ecourts.gov.in/hcservices/

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the account holder PW-9 support the said version of A-1. The bank records also does not indicate PW-9 gave cheques to ratify the payment of cash through debit slips. Therefore, the explanation of A-1 only fortifies the prosecution case that debit slips can be entertained only for internal account transfer of money and cash cannot be withdrawn through debit slips and A-1 as Branch Manager also aware of the said banking practise. So, the explanation of A-1 for permitting A-2 to withdraw cash from some ones account through Debit Slips is not worthy of consideration. The scheme of conspiracy to cheat by abusing the official position is established through the deposition of the accused persons itself. Therefore, the trial court judgment is to be confirmed.

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The learned senior counsel for the appellant K.V.Suresh contented that the sanction for prosecution is without authority and without application of mind. In this connection the evidence of PW-1 and prosecution exhibits Ex.P-1 and Ex.P-2 are relevant. PW-1 Mr. Jeyakar Shetty, had deposed about his rank and the cadre of the A-1. These facts are not disputed. As per PW-1 evidence, upto Scale-III Officer level the Deputy General Manager Industrial Relation Division is the competent authority to take disciplinary action including removal from services. In the sanction order Ex.P-1, which runs to 13 pages PW-1 has specified in detail the modus operandi adopted by A-1 and A-2 for withdrawing cash from M/s.Nimbus Industries Ltd., account through debit slips. The nature of violation of banking practice and the manner how the money was withdrawn fraudulently are the reasons for according sanction to prosecute. He has also listed out the materials which he perused for being satisfied to accord sanction. In the schedule to The Vijaya Bank Officers Employees (Conduct) Regulation 1981 marked as Ex.P.2, the Deputy General Manager is empowered to take disciplinary action including removal from service upto Scale-III officers. Therefore, the trial court finding that the sanction order was accorded by competent person after applying his mind is confirmed.

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The learned counsels for both the appellants would in unison say that there is no due from M/s.Nimbus Industries Ltd., and there is no complaint from M/s.Nimbus Industries Ltd., alleging wrongful loss or unauthorised withdrawal. Therefore, the appellants cannot be held guilty of any of the charges since, the prosecution has failed to prove any dishonest inducement to deliver property or wrongful loss to any one.

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The fact as proved by the prosecution establishes beyond doubt that money has been withdrawn through 11 debit slips from the account of M/s.Nimbus Industries Ltd., without the knowledge of the account holder (PW-9) or his authorisation. Though the defence contents that the account holder know that A-2 is operating their account, the said contention is denied by PW-9.

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Can the Manager of the Bank allow any third party to operate a current account through telephone instruction without written authorisation? is one question which looms large in the mind of this Court. Also, will recovery of due at a later point of time through court proceedings or on take over of assets and liability by some other person, as in this case will absolve the criminality of appropriation of the money by a third party in connivance of the bank official? is yet another question to be addressed.

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From the facts of the case as spoken by the prosecution witnesses as well as the accused, this court wish to hold that allowing third party to operate others account without written authorisation is perse illegal. Any money withdrawn by such process amounts to fraudulent withdrawal without authorisation. In this case A-2 who has withdrawn Rs.31,25,000/- from the account of M/s.Nimbus Industries Ltd., through 11 debit slips and A-1 who has permitted A-2 to withdraw the cash through these debit slips are liable for the offence. Non complaining about the withdrawal or subsequent clearance of dues and closure of account by Nimbus Industries Ltd., will no way mitigate the gravity of crime. For the dishonest inducement to deliver cash and thereby obtaining wrongful gain, both A-2 as well as A-1 are guilty of conspiracy and cheating. From the evidence of Sharma [PW-9] we find that the wrongful loss of M/s.Nimbus Industries Ltd., is taken over by one Ravindiran to whom Sharma has sold the company. Therefore, the contention of the appellants on this score also does not deserve any merit.

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In the result, these Criminal Appeal Nos.487 and 462 of 2006 are dismissed. The Judgment of conviction passed by learned II Additional District Judge for C.B.I cases, Coimbatore in C.C.No.12 of 2003 dated 05.05.2006 is hereby confirmed. The Trial Court is directed to secure the accused to serve the remaining period of sentence, if the accused fail to surrender himself within 60 days from today. The period of sentence already undergone, if any is set off.

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Sd/Assistant Registrar(CS VII)

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//True Copy//

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Sub Assistant Registrar

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bsm

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The Inspector of Police, SPE/CBI/ACB/Chennai.

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The learned II Additional District Judge [CBI cases], Coimbatore,

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The Special Public Prosecutor,(CBI) High Court, Madras.

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+1cc to Mr.D.Dorai Rajan, Advocate Sr.NO.25601 +1cc to Mr.Balasubramanian, Advocate Sr.No.25422/18

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RJI(CO) sm:18.4.2018

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judgment made in Criminal Appeal Nos.462 & 487 of 2006

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Ranjith Kothari v. the Inspector of Police

Case brief

What is this about?

What did the court decide?

Ranjith Kothari v. the Inspector of Police

Case brief

What is this about?

What did the court decide?

What the court decided

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