Krishna Shankar Mehta v. State Central Bureau of Investigation
2012-01-27
TINLIANTHANG VAIPHEI
body2012
DigiLaw.ai
JUDGMENT T. Vaiphei, J. 1. The legality of the judgment dated 29-12-1999 passed by the learned Special Judge, Shillong in Special Case No. 3 of 1989 convicting the appellant under Sections 120B/420, IPC and Section 5(2) of the Prevention of Corruption Act 1947 ("PC Act" for short) and sentencing him to undergo a simple imprisonment of two months under Section 120B, IPC, to undergo another simple imprisonment of six months under Section 5(2) of PC Act and to suffer another simple imprisonment for four months with a fine of 2,000/- under Section 420, IPC, which were to run concurrently. The case of the prosecuting CBI is that they received information to the effect that Mr. K.S. Mehta, the appellant herein, while he was posted as the Branch Manager of the Bank of India, Shillong Branch between 1984 and 1985, had sanctioned two loans amounting to 1,05,000/- and 4,72,500/-to the two co-accused, namely, Mrs. Roseland Swett, w/o E.R. Maingiang, of Jaiaw Laitdom, Shillong-2 and Mr. Rajib Goswamy of Lower Lumparing (Tara Bhavan), Laban, Shillong-4 ("G" for short) respectively for purchase of one second hand truck and one Omni Bus and that even after receipt of the loan amounts by the two co-accused, none of the vehicles came on the road. On the basis of the information, the CBI, Shillong registered a suo motu case bearing No. RC7/88-SHG under Sections 120B/420, IPC and Section 5(2), Prevention of Corruption Act, which was endorsed to Mr. R. Purkayastha, Inspector, for investigation. In the course of investigation, it was found that on 30-4-1985, RG had applied to the Bank of India for sanctioning a loan of 5,35,000/- for purchase of one Omni Bus costing 6,30,000/-. The application was recommended by the appellant (K.S. Mehta) on 30-5-1985, which was forwarded to the Zonal Office of the Bank at Calcutta (as it then was called) for necessary sanction of 4,72,500/-.
The application was recommended by the appellant (K.S. Mehta) on 30-5-1985, which was forwarded to the Zonal Office of the Bank at Calcutta (as it then was called) for necessary sanction of 4,72,500/-. The loan proposal was ultimately sanctioned by the Deputy Zonal Manager (O), Zonal Office on 5-6-1985 subject to the conditions that (1) G would contribute 25% of the total cost of the Omni Bus amounting to 1,57,500/- as the margin money, (2) he should purchase Term Deposit for 94,500/- from the Bank, (3) he should open a recurring deposit of 1,500/- per month for a period of three years and (4) he should give an equitable mortgage of the landed property owned by his mother, Smt. Kunjalata Goswami, of the value of 5/6 lakhs. 2. According to the prosecution, the investigation revealed that G had provided only Rs. 68,500/- as the margin money as against Rs. 1,57,500/- required by the sanction letter. As for opening of a recurring deposit of Rs. 1,500/- per month, he discontinued after paying the 1st instalment. G also did not furnish the equitable mortgage in respect of the landed property of his mother as required in the sanction letter. It is the case of the prosecution that despite these omissions, the appellant went on to disburse the loan amount of Rs. 5,90,000/-to G in three Bank Drafts of Rs. 2,12,000/-drawn in the name of M/s Himatsingka Auto Enterprise, Gauhati (as it then was called), and the remaining amounts in the name of M/s Tinko Coach Builder, Gauhati in two separate drafts for 2,25,000/- and Rs. 88,500/- each. These three drafts were received by the appellant himself even though, as per the Bank norms, they should have been handed over, or sent by post, direct to the drawees. On 12-7-1985, G took delivery of the Tata Chassis No. 3440682-12501 from M/s Himatsingka Auto Enterprise, Gauhati and kept the same for 4/5 days at M/s Tinko Coach Builder (an unregistered firm), a bus body builder, at Ulubari, Gauhati and thence sent the same to another body building firm, namely, Vijay Industries, Jamshedpur, Bihar without getting the body building work done at M/s Tinko Coach Builder, which was owned by another co-accused, Sri Nimai Chitrakar ("C" for short) with another partner, namely, Sri Priyalal Bala ("B" for short) for the 7/8 years.
After B left the workshop in the last part of 1985 following the rift between them, C continued to run the workshop after changing the name of the workshop to M/s N.C. Coach Builder. G also owned three Omni Buses with some partners on hire from private parties prior to the taking of the loan in question, and he used to repair these buses at M/s Tinko Coach Builder, which resulted in close relationship between him and C, who happened to be totally illiterate. According to C, G had taken delivery of the Tata Chassis from a local distributor and kept the same at his garage for a few days whereafter he had taken it away from his garage by saying that he was sending the same to Jamshedpur for body building. 3. It is also the case of the prosecution that G approached C on two days with two Bank Drafts for Rs. 2,25,000/- and Rs. 88,500/- issued in favour of M/s Tinku Coach Builder and requested the latter to hand over the two drafts to him, which C did by handing over the drafts to him (G) at the Gauhati Branch of Purbanchal Bank in the presence of one Raju Barkataki, a business partner of G. According to the prosecution, it was found that M/s Tinko Coach Builder had been maintaining a C/D A/C bearing No. 1389 with the Gauhati Branch of the Purbanchal Bank since 19-10-1983, but was apparently not functioning since 16-11-1985. The entire amount of Rs. 2,25,000/- in respect of the first bank draft was drawn by C through the self-cheque No. AS/CD 216018 issued by himself on 22-7-1985 while the second draft amounting to Rs. 88,300/- was drawn by him again on 13-8-1985 through the self-cheque No. A/CD 216019 issued by himself against the draft value of Rs. 88,500/-. It was clarified by C, on re- examination, that he had just put his signature on the cheques while the other columns were filled up by G and his business partner and that, in the first case, he had merely handed over the cheque to G after signing over it whereafter he (G) withdrew Rs. 2,25,000/- (or the first draft) from the Gauhati Branch of Purbanchal Bank.
2,25,000/- (or the first draft) from the Gauhati Branch of Purbanchal Bank. According to the prosecution, he had also clarified that on the second occasion, he came to the Bank with G and his business partner and put his signature on the cheque while the other particulars were filled up by G and his partner. G paid a sum of Rs. 200/- to C for the favour shown to him. As evident from the correspondences made with the Bank by M/s Vijay Industries, Jamshedpur, G had handed over the chassis to this firm on 20-7-1985, but he had never visited or contacted the firm till 11-3-1988 to take delivery of the completed bus. 4. It is the further case of the prosecution that when the I.O., of the case visited M/s Vijay Industries, Jamshedpur, he found the chassis at the premises of the firm without any sign of construction whereupon he seized the chassis from Shri Rajesh Kumar Sharma, the representative of M/s Vijay Industries and released the same to him on Zima. According to the prosecution, the said Rajesh Kumar Sharma had told the I.O. that G visited the firm on 12-6-1985 (before the loan was sanctioned or disbursed), took the estimate of the bus body building cost from the firm at Rs. 2,03,500/-(including sales tax of Rs. 18,500/-) and agreed to have the bus built by the firm. However, though the firm had received the chassis from G through a driver on 20-7-1985, G never visited, or corresponded with, the firm till 8-8-1987. On 8-8-1987, G wrote his first letter to the firm, but he never requested therein for constructing the body of the chassis, and it was only after registration of the case that he visited the firm on 15-7-1988 and paid Rs. 20,000/-bank draft as the first instalment for the cost of building the body of the chassis, but he again, became dormant thereafter. It is the case of the prosecution that though G had collected the quotation for fabrication of the chassis at an estimated cost for Rs. 2,03,500/- from M/s Vijay Industries on 20-7-1985, he had submitted another quotation from M/s Tinko Coach Builder at a higher rate of Rs.
It is the case of the prosecution that though G had collected the quotation for fabrication of the chassis at an estimated cost for Rs. 2,03,500/- from M/s Vijay Industries on 20-7-1985, he had submitted another quotation from M/s Tinko Coach Builder at a higher rate of Rs. 4,18,000/- for the same work and that since the chassis was received by M/s Vijay Industries on 20-7-1985, the chassis might have, under all circumstances, left Gauhati on 11th or 18th July, 1985 whereas the two drafts for Rs. 2,25,000/- and Rs. 88,500/- were issued in favour of M/s Tinku Coach Builder on 18-7-1985 and on 9-8-1985 when the chassis was no longer at Gauhati. According to the prosecution, it was crystal clear that the appellant had never visited the firm at Gauhati for ascertaining the bus body building and allowed all payments in connivance with G and C and that since the appellant visited M/s Vijay Industries of Jamshedpur in the early part of 1987, he was very much in the know of the whereabouts of the chassis all this time. The aforesaid acts of commission and omission constituted the offences punishable under Sections 120B/420/468/471, IPC and Section 5(2) PC Act and charge sheet was accordingly filed against the appellant, G and C to stand their trial. The learned Special Judge, Shillong, having found a prima facie case against the appellant and the other co-accused, framed the charges against them under Sections 120B/420/468/471, IPC and Section 5(2) PC Act. In the course of trial, the prosecution examined 19 witnesses and exhibited a number of documents to substantiate the charges levelled against them. At the conclusion of the trial, the impugned judgment was passed against the appellant and the other co-accused. It may be noted that the co- accused had expired before the disposal of the trial and further that Mrs. Roseland Swett was never charge-sheeted. 5. In assailing the impugned judgment, the first contention advanced by Ms. A. Paul, the Learned Counsel for the appellant, is that there was no procedural violation by the appellant in disbursing the loan in favour of G without insisting obtaining equitable mortgage inasmuch as the condition of loan appearing in Item No. 24, namely, the execution of equitable mortgage by a third party as additional security, was not there originally.
A. Paul, the Learned Counsel for the appellant, is that there was no procedural violation by the appellant in disbursing the loan in favour of G without insisting obtaining equitable mortgage inasmuch as the condition of loan appearing in Item No. 24, namely, the execution of equitable mortgage by a third party as additional security, was not there originally. Moreover, submits the Learned Counsel, the non-insistence by the appellant upon G to furnish the equitable mortgage deed before releasing the loan amount will not amount to violation of the sanction letter since such security was merely an additional security. She maintains that the loan amount was released by the appellant jointly with another Bank official and not by him alone, and the CBI failed to arraign the other official as co- accused even though he was equally responsible for the release of the loan amount. It is also strenuously urged by the Learned Counsel that no criminal conspiracy is proved or found by the trial Court, and the appellant can at the most be held guilty of procedural lapses and not criminal offence, more so, when the loan amount has already been recovered in the money suit filed by the Bank; no loss was thus caused to the Bank by such acts of commission or omission. It is also contended by the Learned Counsel that the prosecution has failed to prove that it had been the established procedure of the Bank that the drafts for the loan amount had to be handed over direct to the dealer and the bus body builder by registered posts and not to the loanee like the appellant and, as such, no wrong was committed by the appellant in handing over those drafts to the loanee personally. It is also the contention of the Learned Counsel that there is no evidence to show that the appellant had the knowledge that the bus body was constructed at Vijay Industries at Jamshedpur and that he was not, in any case, concerned about the construction of the bus body. As the prosecution has failed to bring home the charges against the appellant, concludes the Learned Counsel, the impugned judgment cannot be allowed to remain, and is, therefore, liable to be set aside. 6. Mr.
As the prosecution has failed to bring home the charges against the appellant, concludes the Learned Counsel, the impugned judgment cannot be allowed to remain, and is, therefore, liable to be set aside. 6. Mr. V.K. Jindal, the learned senior counsel for the CBI, supports the impugned judgment of conviction and sentences, which, according to him, is based on evidence. He argues that the fact that furnishing of equitable mortgage by a third party as an additional security was the condition precedent for releasing the loan amount, was known to the appellant is evident from Ext. 1 wherein he himself while recommending the sanction of the loan had noted that the mother of the appellant, namely, Smt. Kunjalata Goswamy, who had a landed property worth Rs. 6,00,000/-, would be one of the guarantors for repayment of the loan and also from Condition No. 1(g) of the sanction letter of the Deputy Zonal Manager at Ext. 2 wherein it was clearly stipulated that an equitable mortgage in respect of the landed property owned by Mrs. Kunjalata Goswamy should be created as additional security. According to the learned senior counsel, it was on the basis of these materials that the trial Court correctly held that the appellant in collusion with G wilfully violated the terms and conditions. It is also pointed out by the learned senior counsel that against the sanctioned loan amount of Rs. 4,72,500/-, the appellant disbursed a sum of Rs. 5,25,500/- vide the three drafts, which was done without the approval of the sanctioning authority.
It is also pointed out by the learned senior counsel that against the sanctioned loan amount of Rs. 4,72,500/-, the appellant disbursed a sum of Rs. 5,25,500/- vide the three drafts, which was done without the approval of the sanctioning authority. The learned senior counsel further contends that though the prevailing practice and procedure of the Bank is that the drafts in respect of the loan amount were to be dispatched by the appellant direct to the firms by post or hand delivery and not directly to the loanee, he had handed over the three drafts personally to G. It is also maintained by the learned senior counsel that the appellant knew that the bus body was not constructed at all by M/s Tinko Coach Builder at Gauhati, but was taken away to Vijay Industries at Jamshedpur and, as such, the finding of the trial Court to this effect is not liable to be interfered with as the same is based on the evidence on record, The learned senior counsel also refutes the claim of the appellant that the appellant was not aware of the taking away of the chassis of the omni bus from Gauhati to Jamshedpur as evident from his visit to Jamshedpur for inspection of the chassis in the month of February, 1987 without instruction from his superior authorities. 7. It is also the submission of the learned senior counsel that the motive behind the conspiracy between the appellant and the other co-accused has been clinchingly established from the fact that the lower quotation given by the M/s Vijay Industries was overlooked or ignored by the appellant in favour of the much higher quotation of M/s Tinko Coach Builder: the quotation of C was merely used for the purpose of inflating the cost of the body construction to enable him to obtain undue loan amount. According to the learned senior counsel, by inflating the cost of construction of the bus body from Rs. 2,03,500/- to Rs. 4,18,000/- and by not insisting M/s Tinko Coach Builder to build the body of the chassis and also by disbursing the loan amount beyond the sanctioned amount, the appellant together with G and C cheated the Bank. The trial Court, submits the learned senior counsel has rightly convicted the appellant and the other co-accused under Section 420, IPC.
4,18,000/- and by not insisting M/s Tinko Coach Builder to build the body of the chassis and also by disbursing the loan amount beyond the sanctioned amount, the appellant together with G and C cheated the Bank. The trial Court, submits the learned senior counsel has rightly convicted the appellant and the other co-accused under Section 420, IPC. As the appellant was the Branch Manager of the Bank, he was expected to, and ought to have, followed the established norms and procedure before disbursing the loan amount and he, having violated such norms and procedure, is undoubtedly guilty of misusing/abusing his official position to cause wrongful loss to the Bank, which is punishable under Section 5(2) of the PC Act. He also contends that the recovery of outstanding loan amount by the Bank in a money suit does not absolve the appellant from the liability of criminal offences. He also submits that the death of a co-accused does not and cannot have the effect of exonerating the appellant from the charge of criminal conspiracy since one person alone can also be convicted for criminal conspiracy. Finally, the learned senior counsel assails the sentences imposed by the trial Court upon the appellant, which is disproportionate to the crimes proved against him this is a fit case for exercising the suo motu power of this Court to enhance the sentences imposed upon the appellant as a deterrent punishment-as otherwise wrong signals are being sent to other corrupt officials, whose convictions are highly desirable. In support of his various contentions, the learned senior counsel relies on the following decisions of the Apex Court: (1) Rumi Dhar v. State of W.B., (2009) 6 SCC 364 ; (2) State of M.P. v. Sheetla Sahai & Ors., (2009) 8 SCC 617 ; (3) Ram Narayan Popli v. CBI, (2003) 3 SCC 641 ; (4) Bimbadhar Pradhan v. Orissa State, AIR 1956 SC 469 and (5) Surendra Singh Rautela v. State of Bihar, (2002) 1 SCC 266 . 8. I have carefully considered the contentions raised by the Learned Counsel appearing for both the parties. I have also perused the impugned judgment and the evidence on record. The first point for consideration in this appeal is, whether the appellant violated the terms and conditions for disbursing the loan amount sanctioned by the Zonal Office of the Bank of India?
I have carefully considered the contentions raised by the Learned Counsel appearing for both the parties. I have also perused the impugned judgment and the evidence on record. The first point for consideration in this appeal is, whether the appellant violated the terms and conditions for disbursing the loan amount sanctioned by the Zonal Office of the Bank of India? At the outset, I would like to point out here that no evidence was led by the prosecution either documentary or otherwise that the appellant allowed G to deposit a margin money of Rs. 68,500/- instead of Rs. 1,57,500/- as stipulated in the sanction letter of the loan. Therefore, this particular charge of the prosecution is not proved. As per the letter dated 30-5-1985 (Ext. 2) issued by the Zonal Office at Calcutta (as it then was), the Deputy Zonal Manager of the Bank had sanctioned a sum of Rs. 4,72,500/- to the appellant by way of a term loan for purchase of one omni bus. The loan-carried an interest @ 12.5% per annum and was repayable in 35 equal monthly instalments of Rs. 13,500/- with effect from September, 1985. The case of the appellant is that he had complied with all the terms and conditions of the sanction letter before disbursing the loan amount to the loanee, namely, G. The case of the prosecution, however, is that the appellant disbursed the loan to G without having the equitable mortgage created by the guarantor, namely, Smt. Kunjalata Goswami in respect of her landed property. Clause 1(g) of the sanction letter at Ext.-2 stipulated that "[E]quitable mortgage of the landed property owned by Mrs. Kunjalata Goswami should be created (present market value Rs. 5/6 lacs) as additional security". There is no dispute that no such equitable mortgage was created by the said Kunjalata Goswami when the appellant disbursed the loan amount. On the other hand, the case of the appellant is that such condition was not tick-marked in Ext.-I, which was the loan proposal form, but was subsequently surreptitiously inserted without his knowledge. 9. In my opinion, the aforesaid stance taken by the appellant cannot be accepted for more than one reason.
On the other hand, the case of the appellant is that such condition was not tick-marked in Ext.-I, which was the loan proposal form, but was subsequently surreptitiously inserted without his knowledge. 9. In my opinion, the aforesaid stance taken by the appellant cannot be accepted for more than one reason. In the first place, PW 7, who was the Assistant Manager of the Bank at the relevant time and who had co-signed the Bank drafts in question, admitted in his deposition that one condition to be fulfilled prior to disbursement of the loan was the creation of the equitable mortgage of the landed property owned by Mrs. Kunjalata Goswami of the market value of 5,00,000/- or 6,00,000/-. This statement is not denied by the appellant in the cross-examination. The testimony of PW 3 in his cross- examination is also more or less to this effect. PW 3, who was the successor-in-office of the appellant, in his deposition also testified that creation of such equitable mortgage was the condition to be fulfilled prior to the disbursement of the' loan and that the loanee (G) had not meticulously fulfilled such condition; it was the duty of the Branch Bank to insist execution of equitable mortgage by the said guarantor in respect of such landed property. Secondly, the omission to mention this clause in the loan proposal form, even if we assume that no such condition was contemplated therein, is not really decisive, for what is more important is that such term was unequivocally stipulated at Clause 1(g) of the sanction letter at Ext.-2. The appellant was bound by such term and condition imposed by the sanctioning authority, which could not be ignored by him before disbursing the loan amount. Thirdly, in the letter of recommendation for the loan dated 30-5-1985 (Ext.-1) prepared and signed by no less a person than the appellant himself vide Ext.-1(1), he had mentioned that the guarantor No. 1, Smt. Kunjalata Goswami, the mother of G, was having a house worth Rs. 6 lacs situate at Laban, Shillong thereby implying that this landed property was made being available for the additional security of the loan. If such property was not contemplated for equitable mortgage, what was the need for mentioning the same in his recommendation?
6 lacs situate at Laban, Shillong thereby implying that this landed property was made being available for the additional security of the loan. If such property was not contemplated for equitable mortgage, what was the need for mentioning the same in his recommendation? That the appellant was aware of the existence of such term and condition is evident from Ext.-13, which is the application dated 18-7-1985 addressed to the appellant for allowing him to submit the land deeds belonging to his mother who was his guarantor within two months and for sanctioning the loan amount. Though the word used was "sanctioning", the prayer was obviously for releasing/disbursing the loan amount without waiting for creation of the said equitable mortgage, after all, the loan was already sanctioned as early as 30-5-1985 (Ext.-2). Consequently, the inference is irresistible and the conclusion inescapable that the appellant had knowingly disbursed the loan amount even before the guarantor executed the equitable mortgage in respect of her landed property. Such act of omission on the part of the appellant undoubtedly violates the banking norms and practices. It may incidentally be noted that the equitable mortgage was never executed by the guarantor. 10. It is also the case of the prosecution that the appellant had actually released a sum of Rs. 5,25,500/- to G instead of Rs. 4,72,500/-, which was the loan amount actually sanctioned thereby unauthorizedly disbursing much more than the sanctioned amount. From the sanction letter dated 30-5-1985, which was exhibited as Ext.-2, it is evident that the term loan was sanctioned up to a limit of Rs. 4,72,500/-. There is no dispute at the bar on this count. PW 1, who was working in the Bank at the material time, testified that a demand draft for three Bank drafts for Rs. 2,12,000/- bearing variable No. 14/1160 dated 5-7-1985, Rs. 2,25,000/- bearing variable No. 14/1330 dated 18-7-1985 and for Rs. 88,500/- bearing variable No. 14/1569 dated 9-8-1985, all bearing the signature of the appellant, were issued by Shillong Branch of Bank of India in the name of M/s. Himatsingka Auto Enterprises and Tinko Coach Builder respectively. The witness exhibited the three Bank drafts as Ext.-14,15 and 16 respectively and identified the signatures of the appellant as Exts.-14(1), 15(2) and 16(2) respectively.
The witness exhibited the three Bank drafts as Ext.-14,15 and 16 respectively and identified the signatures of the appellant as Exts.-14(1), 15(2) and 16(2) respectively. The genuineness of these drafts or the fact they were so issued to the two firms are not disputed by the appellant in his cross-examination. From the above unimpeachable documents/ it is beyond any shadow of doubt that though G was sanctioned a loan amount up to the limit of Rs. 4, 72,500/-, the appellant had actually disbursed Rs. 5,25,500/-, which is in excess of Rs. 59,000/-. It may be noted that PW 1 is fully corroborated by the statements of PW 2, PW 6, PW 7 in respect of the loan amount so sanctioned and the amounts actually disbursed to the firms by Bank drafts. On the basis of aforesaid findings, the prosecution has clinchingly proved that the appellant released more than the amount actually sanctioned by the sanctioning authority, which is in violation of the directions of the sanctioning authority. There is also no dispute that the three drafts issued by the Bank for purchase of the Omni Bus and fabrication of the chassis were not sent direct to the drawees, but were handed over to the G, who then presented them to the drawee. 11. This then takes me to the further question as to whether the appellant knew that the body of the chassis purchased from M/s Himatsingka Auto Enterprise was not constructed at M/s Tinko Coach Builder, but was taken to Vijay Industries at Jamshedpur. Before proceeding further, it may be noticed that while making the loan, G, apparently in terms of clause 23 had indicated the name of the garage as "M/s Tinko Coach Builder" and vide Ext.-6 submitted the quotation for construction of the bus body. The estimate cost offered therein was to the order of Rs. 4,19,000/-. Incidentally, it may be noticed that at or about the same time, Vijay Industries had also issued quotation dated 12-6-1985 addressed to G vide Ext.-26 for fabrication of the chassis at the rate of Rs. 2,03,500/-. However, there is no evidence to show that the appellant knew the existence of this letter at Ext.-26. No evidence was led by the prosecution on this count.
2,03,500/-. However, there is no evidence to show that the appellant knew the existence of this letter at Ext.-26. No evidence was led by the prosecution on this count. Therefore, it is not possible to conclude that the appellant knew that Vijay Industries had offered to fabricate the chassis at a much lower rate than Tinko Coach Builder. Condition No. 1(d), among others, required G to obtain the garage address and the stamped letter from the body builder. Ext-12 is the stamped letter by which M/s Tinko Coach Builder hypothecated the bus chassis in question with the Bank and declared that the firm agreed to hold and possess the said chassis to the order of the Bank and should hand over the same to the Bank on mere demand. The Bank drafts at Exts.15 and 16 amounting to Rs. 2,25,000/-and Rs. 88,500/- respectively were issued in the name of M/s Tinko Coach Builder on 18-7-1985 and 9-8-1985 respectively. The sanction letter nowhere mentioned any express stipulation that fabrication of the chassis could be done by the loanee only at M/s Tinko Coach Builder. In fact, PW 19, who was the I.O. of the case, testified that in the sanction letter at Ext. 3, there were no terms and conditions stipulating that the body of the chassis was to be constructed only at Gauhati. However, there was an implied condition that the fabrication was to be done only by the firm in whose favour the Bank drafts were issued by the Bank. This is reinforced by the execution of the letter of hypothecation at Ext.-12 by the firm in favour of the Bank. 12. It is the case of the prosecuting CBI that the fabrication was not done at M/s Tinko Coach Builder" at Gauhati, but was taken to the firm Vijay Industries at Jamshedpur. At this stage, it may noted that ho shred of evidence has been produced by the prosecution to establish that the appellant had the duty to inspect the vehicle after disbursement of the loan amount to the loanee. PWs 3, 6, 7 and 19 deposed that there was no irregularity in handing over the drafts for the firms directly to G. No standing instructions or rules have been exhibited by the prosecution to substantiate the charge that it was obligatory for the appellant to dispatch the drafts directly to the drawees and not to the lonee.
PWs 3, 6, 7 and 19 deposed that there was no irregularity in handing over the drafts for the firms directly to G. No standing instructions or rules have been exhibited by the prosecution to substantiate the charge that it was obligatory for the appellant to dispatch the drafts directly to the drawees and not to the lonee. PW 3 deposed that during his tenure as Manager of the Bank, he came to know that the chassis was lying at Jamshedpur although the cost of the body building had been paid in full to M/s Tinko Coach Builder at Gauhati (as it then was) in 1985. He exhibited the letter dated 24-7-1987 as Ext-22 written by Vijay Industries, Jamshedpur addressed to G with a copy endorsed to the Branch Manager of the Bank. The fact that M/s Tinko Coach Builder did not fabricate the chassis and the further fact the same was sent to Vijay Industries at Jamshedpur is not disputed by the appellant. Though the appellant feigned ignorance about this letter, he admitted in answer to Question No. 11 of his examination under Section 313, Cr PC that in February, 1987, he made an inspection at Jamshedpur Vijay Industries as per the direction of then Zonal Manager, Ms. Santhanem and that he made a report that the chassis of the omni bus of G had been lying at Jamshedpur Vijay Industries. The question is, when did he come to know that the chassis had been taken away from M/s Tinko Coach Builder at Gauhati, which was the garage in whose favour the Bank drafts were issued? The case of the prosecution is that he knew this all along and was concealing this fact the burden of proof is upon him to show that he did not know the transfer of the chassis of the bus from Tinko Coach Builder to Vijay Industries at Jamshedpur prior to 27-2-1987 inasmuch as this fact is a fact specially within his knowledge and no such proof is forthcoming from the appellant. 13. In my opinion, accepting the contention of the prosecution in a case of this nature will amount to putting the burden of proof wrongly upon the accused.
13. In my opinion, accepting the contention of the prosecution in a case of this nature will amount to putting the burden of proof wrongly upon the accused. The fact that the appellant visited Vijay Industries at Jamshedpur on 7-2-1987 does not necessarily lead to the conclusion that he knew the chassis had been shifted to Jamshedpur from Gauhati way back in July, 1985. Secondly, the question whether the appellant had visited Jamshedpur on 27-2-1987 on the instruction of the Zonal Manager is a matter which can be proved by the prosecution by adducing the evidence of the Zonal Manager. Moreover, as found by me earlier, no duty was cast upon the appellant to inspect the vehicle an Tinku Coach Builder after disbursement of the loan. In a criminal trial, the burden of proof that the accused is guilty of the offence is always and is entirely thrust upon the prosecution, howsoever difficult the task is. Whether the appellant had visited Vijay Industries at Jamshedpur under instruction from the Zonal Manager or not is not a fact specially within the knowledge of the appellant alone. Section 106, Evidence Act refers to cases where defence of the accused depends on his proving a fact especially within his knowledge and of nobody else; it cannot apply when the fact is such as to be capable of being known also by persons other than the accused. The prosecution has the duty to produce the best evidence available to them to prove their case and not rely on the evidence of the accused, who has the right to remain silent unless required him to do so by law, which is not the case here. By not examining the Zonal Manager of the Bank, who was alleged to have instructed the appellant to visit Vijay Industries at Jamsehdpur, who should be able to prove whether he had directed the appellant to make such visit, or if he did so, to explain for what purpose or under what circumstances the visit had been directed by him/her, the prosecution is unable to prove that the appellant knew the taking away of the chassis to Jamshedpur in 1985 just after disbursement or that he knew that G was taking away the chassis from Gauhati to Jamshedpur, much less, he colluded with G for taking away the chassis to Jamshedpur contrary to the Bank norms.
The prosecution cannot choose a short cut route to convict the appellant with criminal offences; the burden of proof in a criminal case never shifts to the accused. 14. The danger of creating circumstantial evidence by Court to convict an accused where there is none has been lucidly pointed by the Apex Court in S.P. Bhatnagar v. State of Maharasthra, (1979) 1 SCC 535 , in para 21, 22 and 23 of the judgment, which read thus : 21. As the Courts below have rested their judgments on a constellation of circumstances, it would be well to bear in mind the fundamental rule relating to the proof of guilt based on circumstantial evidence, there is always a danger that conjecture or suspicion may take me place of legal proof In such cases the mind is apt to take pleasure in adapting circumstances to one another, and even straining them a little, if need be, to force them to form parts of one connected whole, and the more ingenious the mind of the individual, the more likely it is, considering such matters, to overreach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete. 22. In cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established, and all facts so established should be consistent only with the hypothesis of the guilt of the accused. Again, the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused. (See Hanumant Govind Nargundkar v. State of M.P., Palvinder Kaur v. State of Punjab and Charan Singh v. State of U.P.) 23.
(See Hanumant Govind Nargundkar v. State of M.P., Palvinder Kaur v. State of Punjab and Charan Singh v. State of U.P.) 23. The principle that inculpatory fact must be inconsistent with the innocence of the accused and incapable of explanation on any other hypothesis than that of the guilt does not mean that any extravagant hypothesis would be sufficient to sustain the principle, but that the hypothesis suggested must be reasonable. (See Govinda Reddy v. State of Mysore) 15. Thus, on the facts so found, the question to be determined is whether there are sufficient circumstantial evidence to show that any offence of Section 420, IPC is committed by the appellant. An offence under Section 420, IPC has the following essential ingredients : (i) There must be deception i.e. the accused must have deceived someone; (ii) that by the said deception, the accused must have induced a person : (a) to deliver any property; or (b) to make, alter or destroy the whole or part of the valuable security or anything which is signed or sealed and which is capable of being converted into a valuable property; (iii) that the accused did so dishonestly. Deception practiced on a person is the gravemen of the offence of cheating. Ail deceptions, however, do not amount to cheating. In order to constitute cheating, there must be deception which should always precede the fraudulent or dishonest inducement and it must be established that the intention of the accused was dishonest even at the time of making the promise. A promise and its failure of fulfilment without the above mental element would constitute only a civil liability. In Union of India v. I.S. Khanna, (1972) 3 SCC 873 , where two military officers were charged with manipulations in placing supply orders with a firm, of obtaining supplies even before issuing orders in relation to them were placed, and in some cases, even before issuing quotation inquiries as required by the relevant rules and also that they paid exorbitant prices for those materials, that the quotations were opened contrary to the rules without keeping a second officer present, it was held that the procedure might not be in accord with the rules, but a breach of procedure does not mean fraud or any other criminality.
In other words, broadly speaking, breach of procedure without involving any fraud or deception cannot amount to cheating Again in Abdulla Pagarkar v. State (Union Territory of Goa), (1980) 3 SCC 110 , where evidence on record merely made out that the accused proceeded to execute the work in flagrant disregard of the relevant rules of the General Financial Rules (G.F.R.), and even of ordinary norms of procedural behaviour of Government officials and contractors, such disregard by itself does not amount to cheating or an offence under the Prevention of Corruption Act when no material was placed to indicate the bills or the summaries in question were false in any material particular. This is another instance of executing a work in disregard of relevant, but which, nevertheless, does not, and cannot, amount to cheating. (Underlined for emphasis) 16. There can be no dispute that the appellant has certainly violated the following terms and conditions of the loan, namely, (i) he did not obtain equitable mortgage from the mother of the G, who had offered to mortgage her landed property situate at Shillong, before disbursing the loan amount and (ii) he disbursed more than the loan amount sanctioned by the Zonal Office, which was the competent authority to sanction this particular loan i.e. Rs. 5,25,500/- as against the sanctioned amount of Rs. 4, 72,500/-. However, the prosecution has not been able to prove with sufficient evidence the following charges: (i) there were rules or standing instructions requiring the appellant to inspect the vehicle after disbursement of the loan amount by him or to dispatch the loan amount directly to the drawee and not to the borrower; (ii) the appellant knew the existence of the quotation at Ext.-26 from Vijay Industries offering construction of the body of the chassis at the rate lower than half of the rate offered by Tinko Coach Builder before he recommended the loan application of G or even after or before disbursement of the loan amount to G and (iii) the appellant knew the transfer of the chassis by G from Tinko Coach Builder, Gauhati to Vijay Industries at Jamshedpur on or immediately after the date of the transfer: the only evidence available is that he visited this industries on 27-2-1987 i.e. about two years of disbursing the loan amount by him.
Thus, on the facts so found, there is no clinching evidence to establish that the appellant knew before recommending the loan proposal of G or before or at the time of disbursement of the loan by him to G that Vijay Industries had given to G the quotation at Ext.-26 offering much lower rate for fabrication of the chassis than Tinko Coach Builder or of the transfer of the chassis from Gauhati to Jamshedpur. No evidence could also be produced by the prosecution to prove that any standing instructions or established practice and procedure have been violated by the appellant by not making inspection of the vehicle after disbursal of the loan amount or by directly handing over the drafts in respect of the loan amounts to the appellant and not to the drawees. In any case, violation of rules alone, without any dishonest or fraudulent intention, is not enough to constitute the offence of cheating; such violation can at the most constitute a civil liability. 17. At any rate, this is a case where there can at the most be strong suspicion about the involvement of the appellant for the commission of cheating, but suspicion, howsoever grave it may be, cannot take the place of legal proof. As cautioned by the Apex Court in S.P. Bhatnagar (supra), a criminal Court should guard itself against the tendency to take pleasure in adapting circumstances to I one another, and even in straining them a little, if need be, to force them to form parts of one connected whole: it cannot assume the role of a prosecutor and attempt to convict an accused without sufficient evidence in its anxiety to curb corruption in public life. In my opinion, this is a case where the evidence produced by the prosecution on the guilt or innocence of the appellant is, at the most, equally balanced so much so that there can be two opinions on whether or not the appellant is guilty of the offence of cheating. If there can be two opinions on the guilt or innocence of the appellant in respect of the offence of cheating charged against him, the benefit of doubt must be given to the appellant.
If there can be two opinions on the guilt or innocence of the appellant in respect of the offence of cheating charged against him, the benefit of doubt must be given to the appellant. In other words, the circumstances from which the prosecution desires this Court to draw the conclusion of guilt are full of missing links and what little circumstances so established by them do not exclude every hypothesis but the one proposed to be proved. In other words, there is no a chain of evidence so complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the appellant. Under such circumstances, it is difficult to sustain the conviction of the appellant by the trial Court in respect of the offence of Section 420, IPC. 18. The next question for determination is, whether there is evidence against the appellant for the offence of Section 5(1)(d) punishable under Section 15(2) of the Prevention of Corruption Act, 1947 against the appellant? At the outset, it may be pointed out that the Prevention of Corruption Act, 1988 has now replaced the Prevention of Corruption Act, 1947. However, since the instant case was relating to the incident which took place in 1985 and the case itself registered around the same year, the appellant was obviously booked under Section 2(G) read with Section 5(1)(d) of Prevention of Corruption Act, 1947 ("the Act" for short). Section 5(1)(d) and Section 5(2) of the Act are in the following terms : (5). Criminal misconduct in discharge of official duty.--(1) A public servant is said to commit the offence of criminal misconduct-- (a) **** (b) **** (c) **** (d) if he, by corrupt or illegal means or by otherwise abusing his position as a public servant, obtain for himself or for any other person any valuable thing or pecuniary advantage; or (e) **** (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine : Provided that the Court may, for any special reasons recorded in writing, impose a sentence of imprisonment of less than one year. 19.
19. The Apex Court in Dalpat Singh v. State of Rajasthan, AIR 1967 SC 17 has explained Section 5(1)(d) of the Act in the following manner : The ingredients of the offence under Section 5(1)(d) are : (1) that the accused should be a public servant, (2) that he should use some corrupt or illegal means or otherwise abuse his position as a public servant, (3) that he should have obtained a valuable thing or pecuniary advantage, and (4) for himself or any other person. 20. The meaning and ambit of the phraseology "by corrupt or illegal means or by otherwise abusing his position as public servant" used in Section 5(1)(d) of the Act has been succinctly explained by the Apex Court in C.K. Damodaran Nair v. Govt. of India, (1997) 9 SCC 477 at paragraph 12, which reads thus : 12. The position will, however, be different so far as an offence under Section 5(1)(d) of the Act is concerned. For such an offence prosecution has to prove that the accused "obtained" the valuable thing or pecuniary advantage by corrupt or illegal means or by otherwise abusing his position as a public servant and that too without the aid of the statutory presumption under Section 4(1) of the Act as it is available only in respect of offences under Section 5(1)(a) and (b) and not under Section 5(1)(c), (d) or (e) of the Act. "Obtain" means to secure or gain (something) as the result of request or effort (Shorter Oxford Dictionary). In case of obtainment the initiative vests in the person who receives and in that context a demand or request from him will be the primary requisite for an offence under Section 5(J)(d) of the Act unlike an offence under Section 161, IPC, which, as noticed above, can be, established by proof of either "acceptance" or "obtainment 21. In my opinion, The above legal position is best understood by referring to R. Balakrishna Pillai v. State of Kerala, (2003) 9 SCC 700 , which was the case in which due to shortage of electricity in the State of Karnataka, electric energy was imported by the State of Karnataka from the State of Kerala. The Kerala State Electricity Board (KSEB) supplied electricity to the Karnataka Electricity Board (KEB) at the rate of 42 paisa per unit.
The Kerala State Electricity Board (KSEB) supplied electricity to the Karnataka Electricity Board (KEB) at the rate of 42 paisa per unit. The KEB charged for the said electricity used by the industries in Karnataka at the rate of 80 paisa per unit whereas for the electricity supplied to a company, Graphite India Ltd. (M/s Gill), Bangalore, it charged @ 64 paisa per unit i.e. to say 16 paisa less as compared to the rate charged by it from its consumers. According to the prosecution, the two appellants A-I (Minister for Electricity, Govt. of Kerala) and A- 2 (Technical Member/Chairman of the KSEB) abused their position for the benefit of M/s GILL by earmarking' a definite quantity of electricity and supplying the same to M/s GILL without sanction of the State Government as per the requirement under the law. It was also contended that no written agreement was entered into between KSEB and KEB for the supply of electricity. The Courts below convicted the appellants under Section 5(2) read with Section 5(1)(d) of the Act for having caused M/s GILL to obtain a valuable thing, namely, electricity by selling it to M/s GILL illegally and by abusing their official position as public servants, which also resulted in pecuniary advantage to M/s GILL to the tune of Rs. 19,58,610.40. Setting aside the conviction and sentence, the Apex Court held at paras 40 and 46 : 40. In the light of the meaning of the word "obtains", it may have to be seen as to whether there was any element of effort on the part of the appellants by reason of which it could be said that electricity was caused to be obtained by them to M/s GILL, that too on a lower rate causing pecuniary advantage to M/s GILL. The position of the appellants has to be considered as that of a receiver or one who illegally obtained a valuable thing. The documentary evidence as well as the oral evidence as referred to in the earlier part of this judgment clearly established that the state of Karnataka/KEB contacted A-I for assistance in the matter of supply of electricity due to grim shortage of energy in the State of Karnataka.
The documentary evidence as well as the oral evidence as referred to in the earlier part of this judgment clearly established that the state of Karnataka/KEB contacted A-I for assistance in the matter of supply of electricity due to grim shortage of energy in the State of Karnataka. Time and again in different meeting and otherwise the State of Karnataka/KEB had been emphasising their requirement of electricity and supply of more energy stressing upon the need for their industries, some of which were named including M/s GILL and Wheel and Axle Plant, so much so that they had even advised M/s GILL also to make effort and use their good offices with Kerala authorities for supply of more electricity. So far as the response of the appellants is concerned, it is clear that they only told that they would look into their demands and would like to assist to the maximum possible which would also depend upon the ensuing monsoon situation. The effort has throughout been on the part of the State of Karnataka/KEB to obtain more and more energy stressing the pressing need of the State on various counts. It is not to be found that the State of Kerala/KSEB, A-1 or A-2 ever made efforts to sell Kerala energy to KEB nothing to say of M/s GILL. Had that been so, there was no occasion for the State of Karnataka/KEB to advise M/s GILL to use their good offices with Kerala authorities for the supply of energy. It is also evident from documentary evidence that whatever energy was exported from Kerala was taken in the general pool of electricity in the State of Karnataka/KEB and the distribution thereof used to be made by the State of Karnataka/KEB and the Chief Minister. Some stray utterances made in some letters or internal documents of KEB that KSEB had agreed for certain quantity of energy for M/s GIL would in no way lead to the inference that the State of Kerala/KSEB, A-1 or A-2 had earmarked any supply for M/s GILL. Even according to them, KSEB had only agreed to spare electrical energy for M/s Gill which definitely shows that initiative was on the part of the State of Karnataka/KEB. There is no case of initiative or apart on the part of the KSEB for supply of energy. It is rather the other way round.
Even according to them, KSEB had only agreed to spare electrical energy for M/s Gill which definitely shows that initiative was on the part of the State of Karnataka/KEB. There is no case of initiative or apart on the part of the KSEB for supply of energy. It is rather the other way round. The reliance placed by the prosecution on such letters or non-reply of certain letters is misplaced. The primary requisite of offence under Section 5(1)(d) of "obtaining" any valuable thing or pecuniary advantage for any other person, in absence of any effort, initiative or request on the part of the appellants shatters the charge in view of the decision in the case of Damodaran. So far as causing pecuniary advantage or profit to M/s Gill is concerned, we have made a detailed discussion about the same that it was purely a matter between the State of Karnataka/KEB and M/s GILL to decide what price was to be charged by KEB from M/s GILL for supply of imported energy. There is no allegation or evidence to show that the State of Kerala/KSEB or A-1 and A-2 had any say or hand in lowering of the price for M/s GILL by the State of Karnataka/KEB. It may be indicated that earlier also there have been instances of supply of imported energy at a lower rate to M/s GILL and Wheel and Axle Plant by KEB. In any case it was a matter between the State of Karnataka/KEB and M/s GILL or other industries. Therefore, it is also incorrect to say that the appellants caused any profit to occur to M/s GILL. (Underlined for emphasis) 46. Thus, looking to the definition of the crime in the case at hand, namely, clause (d) of sub-section (1) of Section 5 of the Act, according to the principle indicated above, it is necessary that the act must have been done illegally abusing his position as a public servant for obtaining benefit, pecuniary or otherwise, for himself or someone else. This is an offence which would require an intention to accompany the act. The element of mental state would be necessary to do a conscious act to get the required result of pecuniary advantage or to obtain any valuable thing, even if it is for someone else, then too an element of mental state must be there at the relevant time.
The element of mental state would be necessary to do a conscious act to get the required result of pecuniary advantage or to obtain any valuable thing, even if it is for someone else, then too an element of mental state must be there at the relevant time. In view of the facts and circumstances indicated in the discussion held earlier in this judgment, and findings recorded on facts, we firstly hold that facts leading to the charges are not proved and we also find that the element of mens rea and intention is totally lacking. The electrical energy was exported to Karnataka/KEB at the request of the State of Karnataka during the period of crisis of shortage of energy which is not objected to, so as to be illegal but for a part of it which is allocated by the State of Karnataka/KEB to M/s GILL which constitutes no offence. The prosecution failed to prove the case of sale of electricity by KSEB to M/s GILL or KSEB or A-1 and A-2 having caused profit to M/s GILL. Admittedly the appellant did not stand to gain in any manner. The prosecution case thus fails. 22. Thus, what is of significance in respect of the offence punishable under Section 5(1)(d) of the Act is that for conviction a public servant, he should obtain the valuable thing or pecuniary advantage by corrupt or illegal means or by otherwise abusing his position as a public servant and in case of obtainment such valuable thing or pecuniary advantage, the initiative vests in the person who receives and in that context a demand or request from him will be the primary requisite for an offence under Section 5(1)(d) of the Act. For example, if the valuable thing or pecuniary advantage accrued to a third person stems from the act of commission or omission of the public servant, the ingredients of Section 5(1)(d) will not be satisfied unless the same resulted from the demand or request or initiative to that effect made by the beneficiary to the public servant. In the instant case, the following circumstances have been proved to the hilt: (1) The appellant disbursed a sum of Rs. 5,25,500/- by way of loan to G even before the guarantor created an equitable mortgage in respect of her landed property.
In the instant case, the following circumstances have been proved to the hilt: (1) The appellant disbursed a sum of Rs. 5,25,500/- by way of loan to G even before the guarantor created an equitable mortgage in respect of her landed property. (2) The appellant in violation of the sanction letter disbursed the loan amount to G even before the creation of the said equitable mortgage of the landed property of the mother of G on the promise made by the latter that the land deed would be submitted within two months (see Ext-13). There is also no evidence that the equitable mortgage was created at all even after that. (3) The disbursement of the loan amount without creation of the said equitable mortgage was made by the appellant in violation of the sanction letter on the specific request to that effect made by G vide his application dated 18-7-1985 at Ext.-13. (4) The appellant disbursed a sum of Rs. 5,25,500/- to G as against the sum of Rs. 4,72,500/- sanctioned by the Zonal Manager, who was the competent authority to sanction a loan exceeding Rs. 30,000/-; a sum of Rs. 53,000/- was thus overpaid by him to G. (5) The appellant did not even bother to get the equitable mortgage it: respect of the landed property created by the mother of G, who had offered to mortgage the same, even after disbursal of the loan amount. (6) The appellant by abusing his position enabled G to obtain from the Bank pecuniary advantage to the tune of Rs. 4,72,500/-. (7) The appellant in violation of the loan sanction letter unauthorisedly disbursed an excess amount of Rs. 53,000/- to G thereby enabling the latter to gain pecuniary advantage. 23. Thus, on the aforesaid circumstances established, the prosecution has successfully proved that the appellant by abusing his position as the Branch Manager of the Bank of India; Shillong Branch had obtained for pecuniary advantage to the tune of Rs. 5,25,500/-, which is punishable under Section 5(2) read with Section 5(1)(d) of the Act. It is worthy of notice that no discretion was conferred upon the appellant by the Zonal Office to relax or modify the terms and conditions of the loan.
5,25,500/-, which is punishable under Section 5(2) read with Section 5(1)(d) of the Act. It is worthy of notice that no discretion was conferred upon the appellant by the Zonal Office to relax or modify the terms and conditions of the loan. It was a conscious act on the part of the appellant to flout the terms and conditions of the sanction letter at the behest of G to enable him to obtain pecuniary advantage to the extent of Rs. 5,25,500/-. Coming now to the charge of criminal conspiracy, it may be noted that criminal conspiracy under Section 120B, IPC is an independent offence and is punishable separately. The ingredients of the offence of criminal conspiracy are : (i) an agreement between two or more persons; (ii) the agreement must relate to doing or causing to be done either (a) an illegal act; (b) an act which is not illegal in itself but is done by illegal means. The term "illegal" is defined by Section 43, IPC as follows : The word "illegal" is applicable to everything which is an offence or which is prohibited by law, or which furnishes ground for a civil action; and a person is said to be "legally bound to do" whatever it is illegal in him to omit". A very wide meaning is given to the word "illegal". The word "illegal" covers not merely a tort but a breach contract which furnishes ground for civil action, that is to say, in respect of which damages can be obtained under Section 73 of the Indian Contract Act, or which can be enforced specifically. The following observations of the Apex Court in R. v. Oil, (2009) 11 SCC 737 on criminal conspiracy are instructive : 74. The Courts, however, while drawing an inference from the materials brought on record to arrive at a finding as to whether the charges of the criminal conspiracy have been proved or not, must always bear in bear that a conspiracy is hatched in secrecy and it is, thus, difficult, if not impossible, to obtain direct evidence to establish the same. The manner and circumstances in which the offences have been committed and the level of involvement of the accused persons therein are relevant factors.
The manner and circumstances in which the offences have been committed and the level of involvement of the accused persons therein are relevant factors. For the said purpose, it is necessary to prove that the propounders had expressly agreed to or caused to be done the illegal act but it may also be proved otherwise by adduction of circumstantial evidence and/or by necessary implication. (See Mohd. Usman Mohammad Hussain Maniyar v. State of Maharashtra). 75. The following passage from Russell on Crimes (12th Edn., Vol. 1) referred to by Jagannatha Shetty, J. in Kehar Singh v. State (Delhi Administration), (1988) 3 SCC 609 brings out the legal position succinctly : The gist of the offence of conspiracy then lies, not in doing the act, or effecting the purpose for which the conspiracy is fanned, nor in attempting to do them, nor in inciting others to do them, but in forming of the scheme or agreement between the parties. Agreement is essential. Mere knowledge, or even discussion of the plan is not, per se enough. It was further noted in that case that to establish an offence of criminal conspiracy "[i]t is not required that a single agreement should be entered into by all conspirators at one time. Each conspirator plays his separate part in one integrated and united effort to achieve the common purpose. Each one is aware that he has a part in a general conspiracy though he may not know all the secrets or the means by which the common purpose is to be achieved. 76. Dr. Hari Singh Gour in his Commentary on Penal Law of India (5th Edn., Vol. 2, p.1138) elaborates : In order to constitute a single general conspiracy there must be a common design. The evil scheme may be promoted by a few, some may drop out and some may join at a later stage, but the conspiracy continues until it is broken up. The conspiracy develops in successive stages. There may be general plan to accomplish the common design by such means as may from time to time expedient. Their Lordships further quoted therein two other observations of the Apex Court at paras 79, 80 and 81 : "79. In Ram Narayan Popli this Court noted: (SCC p. 778, para 342) "342.....
The conspiracy develops in successive stages. There may be general plan to accomplish the common design by such means as may from time to time expedient. Their Lordships further quoted therein two other observations of the Apex Court at paras 79, 80 and 81 : "79. In Ram Narayan Popli this Court noted: (SCC p. 778, para 342) "342..... Law making conspiracy a crime is designed to curb a moderate power to do mischief which is gained by a combination of the means. The encouragement and support which conspirators give to one another rendering enterprise possible which, if left to individual effort, would have been impossible, furnish the ground for visiting conspirators and abettors with condign punishment." (See also Esher Sineh v. State of A.P.) 80. Recently, in Yogesh v. State of Maharashtra, a Division Bench of this Court held : (SCC p. 402, para 25) 25. Thus, it is manifest that the meeting of minds of two or more persons for doing an illegal act or an act by illegal means is sine quo non of the criminal conspiracy but it may not be possible to prove the agreement between them by direct proof. Nevertheless, existence of the Conspiracy and its objective can be inferred from surrounding circumstances and the conduct of the accused. But the incriminating circumstances must form a chain of events from which a conclusion about the guilt of the accused could be drawn. It is well settled that an offence of conspiracy is a substantive offence and renders the mere agreement to commit an offence punishable, even if an offence does not take place pursuant to the illegal agreement. His Lordship also added therein at para 81 : 81. A conspiracy may further be a general one and a separate one. A smaller conspiracy may be a part of a larger conspiracy. It may develop in successive stages. (Nirmal Singh Kahlon v. State of Punjab) New techniques may be invented and new means may be devised for advancement of common plan. For the said purpose, conduct of the parties would also be relevant. (Underlined for emphasis) 24.
A smaller conspiracy may be a part of a larger conspiracy. It may develop in successive stages. (Nirmal Singh Kahlon v. State of Punjab) New techniques may be invented and new means may be devised for advancement of common plan. For the said purpose, conduct of the parties would also be relevant. (Underlined for emphasis) 24. In the case at hand, as noted earlier, there may not be an evidence against the appellant under Section 420, IPC, for which the prosecution was required to prove the element of deception in existence at or before the time of making the proposal for sanctioning the loan or even at the time of receiving the loan auction letter by the Zonal Office, which was the competent authority to sanction the loan. At that stage, it can no doubt be held that there was no evidence of Section 420, IPC. However, the appellant undoubtedly knew that disbursement of the loan amount by the appellant in favour of G before, creation of equitable mortgage by the mother of G in respect of her landed property, of the disbursement of the amount in favour of G in excess of the loan amount sanctioned by the Zonal Office and of the omission on the part of the appellant to ensure the creation of the said equitable mortgage even after two months as promised by G, are contrary to and in violation of the terms and conditions of the letter sanctioning the loan, which were binding upon him. Violation of such terms and conditions certainly furnishes grounds for civil action and such terms and conditions are also specifically enforceable against G or can give rise to cause of action for breach of contract. In my opinion, the cumulative effect of those circumstances, the surrounding circumstances and of the conduct of the appellant are sufficient to prove that there was meeting of mind between him and G to do an act which was not illegal per se but by illegal means, namely, obtaining of loan by G in violation of the terms and conditions of the letter sanctioning the loan. The agreement between the appellant and G was to obtain loan from the Bank contrary to the terms and conditions of the loan.
The agreement between the appellant and G was to obtain loan from the Bank contrary to the terms and conditions of the loan. In other words, the aforesaid proved circumstances and conduct of the appellant and G unerringly point to the guilt of the appellant on the charge of criminal conspiracy, which is punishable under Section 120B, IPC. The trial Court is correct, though for different reasons, in convicting the appellant under 120B, IPC and Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947, but is wrong in convicting him under Section 420, IPC. 25. It is, however, contended by Ms. A. Paul, the Learned Counsel for the appellant, that the co-accused, G, already died during the pendency of the case and the record of the criminal appeal filed by another co-accused, C (whether he was convicted or acquitted remain unknown being untraceable), and, as such, G alone cannot be convicted under Section 120B, IPC. In my opinion, this issue need not detain us for long as the law has already been firmly settled by the Apex Court as early as 1956 in Bimbadhar Pradhan case (supra) wherein its was held : It is not essential that more than one person should be convicted of the offence of criminal conspiracy. It is enough if the Court is in a position to find that two ore more persons were actually concerned in the criminal conspiracy. If the Courts below had come to the distinct findings that the evidence led on behalf of the prosecution was unreliable, then certainly no conviction could have been based on such evidence and all the accused would have been entitled to acquittal. But that is not the position in this case as we read the judgments of the Courts below. 26. It is next contended by the Learned Counsel for the appellant that other Bank officials who were also involved in the case and similarly situated like the appellant were not prosecuted, and singling out the appellant alone for prosecution is, therefore, unwarranted and illegal being discriminatory. When similar contention was raised in Ram Narayan Popli case (supra), the Apex Court rejected such contention by holding that cannot be a ground for taking a sympathetic view of the conducts of A-I and A-3.
When similar contention was raised in Ram Narayan Popli case (supra), the Apex Court rejected such contention by holding that cannot be a ground for taking a sympathetic view of the conducts of A-I and A-3. The Learned Counsel for the appellant also argues that the Bank has already recovered the loan amount with interest in the money suit filed by it and, as such, the criminal proceeding should not have been continued after recovery of the loan amount. In my opinion, this contention has also been negatived by the Apex Court in a similar case of Ram Dhar case (supra) by holding that civil and criminal proceedings can continue simultaneously. Lastly, it is submitted by the Learned Counsel for the appellant that the condition imposed by Clause 1.(g) of the sanction letter was only for additional security and no serious irregularity was committed by the appellant by not insisting the creation of such additional security. In my judgment, this contention also does not hold water in view of the fact that as already found by me earlier, no discretion was given to the appellant by the Zonal Office for relaxing/ modifying the terms and conditions of the loan. 27. The result of the foregoing discussion is that the appellant was rightly convicted by the trial Court under Section 120B, IPC and Section 5(2) of Prevention of Corruption Act, 1947. As no appeal for enhancement of the sentences imposed by the trial Court is preferred by the respondent, the sentences imposed upon the appellant for both the offences shall remain undisturbed, more so, when the appellant is at his old age and when the complaint was not lodged by the Bank, which admittedly did not suffer an monetary loss after recovery of the loan amount with the interest due in the money suit filed by them in a civil Court. The appellant is, however, acquitted of the charge of Section 420, IPC. The appeal is partly allowed and the impugned judgment stands modified in the manner and to the extent indicated above. The appellant shall surrender before the Special Court/CBI, Shillong within a period of one month from today to serve out the sentences imposed upon him. Transmit the L.C. record forthwith.
The appeal is partly allowed and the impugned judgment stands modified in the manner and to the extent indicated above. The appellant shall surrender before the Special Court/CBI, Shillong within a period of one month from today to serve out the sentences imposed upon him. Transmit the L.C. record forthwith. Before parting, I am constrained to observe that I am disturbed by the nonavailability of the record relating to the connected appeal, namely, Criminal Appeal No. 2(SH) of 2000, which is reported to be missing. It is not known since when this record became untraceable. Missing of case record is a serious matter and cannot be tolerated. The Registrar is directed to make a thorough enquiry into this and make an effort to trace out the missing record, if necessary, by taking the assistance of Meghalaya Police or even CBI and summit the action taken report to this Court within three months. A separate miscellaneous case may be registered to that end.