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2020 DIGILAW 107 (AP)

Veedhi Pandu Ranga Nadha Swamy v. State of A. P.

2020-02-11

CHEEKATI MANAVENDRANATH ROY

body2020
JUDGMENT : Cheekati Manavendranath Roy, J. Both these Criminal Revision Cases arise out of the orders dated 24.11.2016 passed in Crl.M.P.Nos.748 and 749 of 2016 in C.C.No.3 of 2015 on the file of the I Additional Special Judge for C.B.I. Cases, Visakhapatnam, whereby the two separate petitions filed by accused Nos.1 and 2 in the said case under Section 239 Cr.P.C. to discharge them from the said case were dismissed. 2. Since both the said petitions are filed by accused Nos.1 and 2 in C.C.No.3 of 2015, these two Criminal Revision Cases preferred by them were heard together and they are being disposed of by this common order. 3. Facts germane to dispose of these two Criminal Revision Cases may briefly be stated as follows: 4. The Tobacco Board, Guntur, which is an organization under the Government of India, Ministry of Commerce and Industry, every year facilitates insurance coverage for the registered tobacco growers under Group Personal Accident Policy in respect of tobacco barns, stocks and allied structures under Standard Fire and Allied Perils Policy. The Tobacco Board, Guntur for the said purpose invited quotations directly without involving any agent/broker for providing insurance coverage to its registered tobacco growers under the Group Personal Accident Policy to tobacco stocks, barns and allied structures under standard fire and allied perils policy for the years 2010-2013. The Oriental Insurance Company Limited (for short, the "O.I.C.L."), Division Office-II, Guntur, along with other subsidiaries of General Insurance Corporations offered their quotations for the said proposals made by the Tobacco Board, Guntur for extending insurance coverage to the registered tobacco growers. 5. The quotations submitted by the insurance companies were opened at the Head Office of the Tobacco Board, Guntur in the presence of the authorized representatives of the concerned insurance companies. After comparing the rates quoted by different insurance companies, the committee constituted by the Tobacco Board found the rates quoted by the O.I.C.L., Divisional Office-II, Guntur, is the lowest quotation. Therefore, finally, after negotiations with the Divisional Manager and the Development Officer, the competent authority of the Tobacco Board directly awarded the insurance business to the O.I.C.L., Divisional Office-II, Guntur. Accordingly, the Tobacco Board, Guntur, issued cheques towards insurance premiums for coverage under the said Group Personal Accident Policy for registered tobacco growers for all the said three years period i.e., 2010-2013. Accordingly, the Tobacco Board, Guntur, issued cheques towards insurance premiums for coverage under the said Group Personal Accident Policy for registered tobacco growers for all the said three years period i.e., 2010-2013. As per the terms of the policy, there is no intervention of the agents/brokers to secure the business to the O.I.C.L. and the business was directly given by the Tobacco Board to the O.I.C.L.. 6. Accused No.1 was working as Divisional Manager and Head of the O.I.C.L., Divisional Office-II, Guntur, at the relevant time. Accused No.2 was working as Administrative Officer in the O.I.C.L., Divisional Office-II, Guntur, at the relevant time. Accused Nos.3 to 17 are the agents of the O.I.C.L., Divisional Office-II, Guntur. Accused Nos.1 and 2 entered into a criminal conspiracy with the agents, who are accused Nos.3 to 17, during the period between 2010-2013 to cheat the O.I.C.L., Divisional Office-II, Guntur, in the matter of issuing Group Personal Accident Policies for tobacco stocks, barns and allied structures under Standard Fire and Allied Perils Policies in favour of the tobacco growers. In pursuance of the said criminal conspiracy, they have shown the names of accused Nos.3 to 17 in the office copies of the policy schedules as if the said policies issued to the registered tobacco growers were procured by the agents, who are accused Nos.3 to 17 and thereby falsified the records of the O.I.C.L. Wrong entries to that effect were made in the said policy schedules showing the names of the agents-accused Nos.3 to 17 in the policy schedules fraudulently as if the business was procured through agents. Thereafter, accused No.1 released agents' commission on the premiums paid for issuance of insurance policies to a tune of Rs.77,26,305/- towards commission to the agents, who are accused Nos.3 to 17 and subsequently, all the accused Nos.1 to 17 shared the said sum of Rs.77,26,305/- released by accused No.1 towards commission to the agents and thereby had illegal pecuniary gain for them and caused wrongful loss to the O.I.C.L. Therefore, after investigation of the case is completed, CBI has laid the charge-sheet stating that accused Nos.1 to 17 have committed the offences punishable under Sections 120-B, 420, 468, 471 and 477-A of IPC and under Sections 13(2) r/w.13(1)(d) of the Prevention of Corruption Act, 1988. 7. 7. After the accused made their appearance in the trial Court, accused Nos.1 and 2 have filed petitions under Section 239 Cr.P.C. seeking discharge from the said case on the ground that the contents of the charge-sheet and the documents enclosed thereto on the basis of which the prosecution is seeking framing of charges against accused Nos.1 and 2 for the said offences punishable under Sections 120-B, 420, 468, 471 an 477-A of IPC and under Sections 13(2) r/w.13(1)(d) of the Prevention of Corruption Act, 1988, do not disclose a prima facie case even remotely against the petitioners for framing a charge for any of the said offences and the charges are absolutely groundless against them. Therefore, contending that there are absolutely no grounds to frame charge against them for any of the said offences, they prayed to discharge them from the said case. 8. The Senior Public Prosecutor for C.B.I. and ACB cases, Visakhapatnam filed a detailed counter opposing the claim of the petitioners for discharge and thereby resisted the said petitions. 9. After hearing the learned counsel for the petitioners and learned Senior Public Prosecutor for CBI and ACB Cases, the learned I Additional Special Judge for CBI Cases, Visakhapatnam, dismissed the said two petitions filed by accused Nos.1 and 2 separately by the impugned orders on the ground that as per the voluminous documentary evidence produced by the prosecution that there is a prima facie case against both accused Nos.1 and 2 to try the case against them and that there are no grounds to discharge them from the said case. 10. 10. The learned Judge in the impugned orders held that as many as 461 documents were filed by the prosecution and cited 22 witnesses to substantiate its case against the accused and that the list mentioned document Nos.12 to 39, enclosed to the charge-sheet, prove that the Tobacco Board awarded the business of issuing insurance policies, directly to the O.I.C.L., Divisional Office-II, Guntur, for the years 2010-11, 2011-12 and 2012-13 and that the list mentioned document Nos.40 to 45 prove that the O.I.C.L., Divisional Office-II, Guntur, has remitted agent commission bills for the aforesaid period though the business was directly given to the O.I.C.L without the intervention of agents and that the said evidence on record shows that accused No.1 has released the said commission amount to accused Nos.3 to 17, who are agents, dishonestly and fraudulently though the business was secured by the O.I.C.L., directly from the Tobacco Board and as such, there is prima facie case against them which is more than mere suspicion to try them for the said offences. 11. Aggrieved thereby, accused Nos.1 and 2 have preferred these Criminal Revision Cases assailing the legality and validity of the impugned orders. 12. Heard Sri P.Kasi Nageswara Rao, Learned Counsel for M/s.Pillix Law Firm, for the petitioners and Sri B.S.P. Chowdary, learned Special Public Prosecutor for CBI, for the respondent. 13. Learned counsel for the petitioners would submit that as per the usual practice the business of securing insurance policies would be processed through registered agents of the insurance company and agent code would also be assigned to all the registered agents and commission would be paid to the said agents for the business procured by them for the insurance company and it is shown in the policy schedules that the said business was procured by the said agents and as such commission was paid to them as per the prescribed norms of the insurance company. Therefore, the petitioners did not resort to any illegal acts of falsifying the records or fabricating the records and they never entered into any conspiracy with accused Nos.3 to 17, who are admittedly the agents of the insurance company. Therefore, the petitioners did not resort to any illegal acts of falsifying the records or fabricating the records and they never entered into any conspiracy with accused Nos.3 to 17, who are admittedly the agents of the insurance company. It is further submitted that it is nowhere stated in the Memorandum of Understanding entered into between the Tobacco Board and the O.I.C.L., that there would not be any intervention of agents to procure the business for the O.I.C.L. or that no commission would be paid to the agents in the matter of issuing insurance policies in favour of the registered tobacco growers. Therefore, the facts of the case do not constitute any offence for which the charge-sheet is filed. He contends that there are no valid grounds to hold that there is any prima facie case against these petitioners to frame a charge against them for any of the said offences and to prosecute them for the said offences. The facts of the case show that the charge would be wholly groundless against them. He would finally submit that the trial Court did not properly appreciate the facts of the case and failed to see that no case is made out whatsoever for any of the said offences alleged against these petitioners and that there are no valid grounds to frame charges against them. Therefore, the trial Court grossly erred in dismissing the petitions filed by accused Nos.1 and 2 and thereby prayed to allow these Criminal Revision Cases and discharge accused Nos.1 and 2 from the said case. 14. Per contra, learned Special Public Prosecutor for CBI would submit that the contents of the Memorandum of Understanding entered into between the Tobacco Board and the O.I.C.L. clearly show that the business was directly given by the Tobacco Board to the O.I.C.L., without intervention of any agents to secure the said business. The contents of the Memorandum of Understanding further show that the premium amounts which were collected from the registered tobacco growers were directly paid by the Tobacco Board to the O.I.C.L., which clearly proves that there is absolutely no intervention of agents to secure the said business. The contents of the Memorandum of Understanding further show that the premium amounts which were collected from the registered tobacco growers were directly paid by the Tobacco Board to the O.I.C.L., which clearly proves that there is absolutely no intervention of agents to secure the said business. He would then contend that none of the policies issued in the name of the registered tobacco growers contain the name or code of any agent/broker which indicates that the business was directly secured without the intervention of the agents-accused Nos.3 to 17. He would submit that, however, accused Nos.1 and 2, who entered into a conspiracy with accused Nos.3 to 17, entered the names of accused Nos.3 to 17 in the office copies of the policy schedules by falsely showing as if the said business was secured by the agents for the O.I.C.L. So, a clear case of criminal conspiracy and falsification of official records and payment of commission to a tune of lakhs of rupees by cheating the O.I.C.L., causing huge pecuniary loss to the O.I.C.L. is made out. He would submit that both documentary and oral evidence is produced, along with the charge-sheet to substantiate each and every allegation relating to the offences for which the charge-sheet is filed, and the same is clearly discussed by the trial Court in the impugned orders and the said facts and circumstances and the evidence on record clearly makes out a prima facie case to frame charges against the accused and to try them for the said offences. Therefore, he submits that it cannot be said under any stretch of reasoning that there is no material to frame any charge against the petitioners and that the charge that would be framed against them would be wholly groundless. So, he finally submits that a strong prima facie case is made out against the petitioners to frame charges against them for the said offences and to try them for the said offences and as such, they are not entitled to discharge as claimed by them and thereby he prayed for dismissal of the Criminal Revision Cases. He strongly supported the impugned orders of the trial Court. 15. I have given my earnest consideration to the aforesaid rival submissions made by the learned counsel for the petitioners and the learned Special Public Prosecutor for CBI. 16. Perused the record. 17. He strongly supported the impugned orders of the trial Court. 15. I have given my earnest consideration to the aforesaid rival submissions made by the learned counsel for the petitioners and the learned Special Public Prosecutor for CBI. 16. Perused the record. 17. The substance of the accusation made against the petitioners and the other accused, as per the charge-sheet laid against the petitioners, is that even though as per the Memorandum of Understanding entered into between the Tobacco Board and the O.I.C.L., the business of issuance of insurance policies in favour of the registered tobacco growers is directly given by the Tobacco Board to the O.I.C.L. without the intervention of any agent/broker, that accused Nos.1 and 2 conspired together with accused Nos.3 to 17, who are the agents/brokers of the said insurance company, and falsely fabricated the records showing the names of the agents, who are accused Nos.3 to 17, in office copies of the policy schedules as if the business was secured through the agents-accused Nos.3 to 17, and thereby, accused No.1 released a huge sum of Rs.77,26,305/- during the relevant period for the years 2010- 2013 illegally towards commission to the agents and thereafter, all of them shared the said money released towards commission to the agents and thereby cheated the O.I.C.L., and fabricated the records and falsified the official records and rendered themselves liable for prosecution for the offences punishable under Sections 120-B, 420, 468, 471 an 477-A of IPC and under Sections 13(2) r/w.13(1)(d) of the Prevention of Corruption Act, 1988. 18. It is not in dispute that accused No.1 was the Divisional Manager and Head of the O.I.C.L, Divisional Office-II, Guntur, and accused No.2 was the Administrative Officer working under accused No.1 in the said office at the relevant time and that accused Nos.3 to 17 are the agents of the said O.I.C.L., Divisional Office-II, Guntur. Similarly, the material fact that there was a Memorandum of Understanding entered into between the Tobacco Board and the O.I.C.L., for issuance of insurance policies in favour of the registered tobacco growers is absolutely not in dispute. Similarly, the material fact that there was a Memorandum of Understanding entered into between the Tobacco Board and the O.I.C.L., for issuance of insurance policies in favour of the registered tobacco growers is absolutely not in dispute. A perusal of the contents of the Memorandum of Understanding which is produced by the prosecution along with the charge-sheet shows that the Tobacco Board, Guntur acted as a facilitator for the insured i.e. the registered tobacco growers and that every year Tobacco Board, which is an Organization under the Government of India, Ministry of Commerce and Industry, has been facilitating the insurance coverage for the registered tobacco growers under Group Personal Accident Policy. It is clear from the first paragraph of the said Memorandum of Understanding that the premium amounts are directly paid by the registered tobacco growers only. Therefore, it is evident that the insured is directly paying the premiums. So, it clearly indicates that there is no intervention of agents/brokers for securing the business to the O.I.C.L. The business was directly secured by the O.I.C.L., through the Tobacco Board. 19. Now, it is relevant to consider the evidence of the official witnesses given as per the statements recorded during the course of investigation. The statements of LW.20 R.Ramesh Babu, Auction Superintendent, working in Tobacco Board, Guntur, shows that his duty is to motivate the farmers to produce the quality crops as prescribed by the Tobacco Board and conduct auctions. He stated that while was working at Vellampalli platform there are around 1500 tobacco growers and 1400 barns are covered in the villages in his jurisdiction and in the month of November, 2010, he received a Circular vide F.No.1(23)/2010-11/PDN/2300-2300 dated 19.11.2010, issued by the Head Office, Tobacco Board, Guntur, stating that during the year 2010-11, during the crop season of the said year, O.I.C.L, Divisional Office-II, Guntur, was entrusted with the work of insurance coverage for registered tobacco growers under the said Group Personal Accident Policy. Similarly, for the remaining two years also the said work was entrusted to the same insurance company. Now, it is significant to note that he has unequivocally stated in his statement that it is mentioned in the above circular that the premiums are directly sent to the O.I.C.L., by the Tobacco Board for the said years 2010-2013. He finally stated that the policies are issued directly without involvement of any agent/broker/mediator. Now, it is significant to note that he has unequivocally stated in his statement that it is mentioned in the above circular that the premiums are directly sent to the O.I.C.L., by the Tobacco Board for the said years 2010-2013. He finally stated that the policies are issued directly without involvement of any agent/broker/mediator. To the same effect is the statement of LW.19 Guduru Uma Maheswara Rao, who is another Auction Superintendent, relating to Kaligiri Platform where there are 1800 tobacco growers and 1600 barns covered in the said village and the statement of LW.18 Kadiyala Chandra Sekhar Rao, who is the Auction Superintendent of Kondepi Platform, covering 45 villages with 3000 tobacco growers and 2100 barns covered in the said village and LW.17 Kale Venkata Raja Prakash, who is the Auction Superintendent of Jangareddygudem Platform covering 80 villages with 2500 tobacco growers and 2900 barns in the said village. LW.16 Vudhayagri Muralidhar, Auction Superintendent, Tangutur-II Platform and LW.15 Kolli Appa Rao etc. They all in unison stated that the policies are directly issued without involvement of any agent/broker/mediator. 20. Now, it is relevant to consider the statements of the Development Officers in O.I.C.L., Divisional Office-II, Guntur. LW.10 Maddineni Madhan Mohan, who worked as Development Officer in the Divisional Office-II, Guntur, stated that as Administrative Officer, his duties are issuing policies to policy holders, processing claims, issuing of cheques to claimants etc. During the year 2010-11, when he was working as Administrative Officer, Divisional Office-II, Guntur-1, he has been entrusted with additional duties as Agency Manager of issuing notification regarding recruitment of agents and preparing them for exams to be conducted by the I.R.D.A. (Insurance Regulatory and Development Authority). Now, it is significant to note that he stated that during the years 2010-11, 2011-12 and 2012-13, the Tobacco Board has awarded tender to O.I.C.L., Divisional Office-II, Guntur, to insure the registered tobacco growers and to issue the policies directly without involvement of any agent/broker/mediator and he further stated that he himself as Administrative Officer signed and issued some policies to Tobacco Board covering registered tobacco growers under the said policies. He finally stated that during the crop season in the year 2010-11, it is not mentioned in the policy schedules regarding the agent/broker code, whereas, the office copies of the same policy schedules contain the agent code. He finally stated that during the crop season in the year 2010-11, it is not mentioned in the policy schedules regarding the agent/broker code, whereas, the office copies of the same policy schedules contain the agent code. So, it shows that in the original policy schedules, there is no mention of agent code. However, in the office copies of the policy schedules, the agent code is incorporated. This prima facie shows the fabrication of the office copies of the policy schedules. 21. It is now significant to consider the statements of LW.1 Chalasani Venkata Subba Rao, who worked as Executive Director of the Tobacco Board, Guntur; LW.2 Choudhary Shanthi Swaroop Patnayak and LW.3- Pamulapati Gangadhara Prasad, who worked as Secretaries, Tobacco Board, Guntur, LW.4-Addanki Phalguni Vedamuni Varada Sthapak, who worked as Manager (Production), Tobacco Board, Guntur; LW.5 Maruthi Rao, who worked as Manager (Extension), Tobacco Board, Guntur, and LW.6 Bandlamudi Nageshwara Mitra, who worked as Manager, Tobacco Board, Guntur. They stated in their 161 Cr.P.C. statements that they have conducted the auction to award the work of issuance of insurance policies to the registered tobacco growers. (1) The O.I.C.L., (2) the United India Insurance Company Limited, (3) the National Insurance Company Limited and (4) the New India Assurance Company Limited, have participated in the said auction and the O.I.C.L., Divisional Office-II, Guntur, quoted the lowest bid and that the said work was entrusted to them finalizing their bid. 22. Thus, the evidence secured by the prosecution, as per the material produced along with the charge-sheet, shows release of commission amounts to the agents. 22. Thus, the evidence secured by the prosecution, as per the material produced along with the charge-sheet, shows release of commission amounts to the agents. So, the cumulative effect of the evidence, both oral and documentary, which is secured by the Investigating Officer during the course of investigation, which is produced along with the charge-sheet, prima facie, establishes that the Tobacco Board acted as a facilitator to the registered tobacco growers for the purpose of securing insurance policies to them under the Group Accidental Policy Scheme and they have called for tenders from various insurance companies and the O.I.C.L., being the lowest bidder, was finally selected by the Committee constituted by the Tobacco Board to that effect and the business of issuing insurance policies to the registered tobacco growers was directly entrusted by the Tobacco Board to the O.I.C.L. after finalizing their bid and there is absolutely no intervention of agent/broker to secure the said business to the O.I.C.L. However, even though, there is no mention of agent code in the original policy schedules that in the office copies of the policy schedules, the agent code was clandestinely incorporated in a deceitful manner to create evidence as if the said business of issuing policies to the registered tobacco growers was secured through the agent/broker and thereby a huge sum of Rs.77,26,305/- was released in the names of the agents for the said three years period of 2010-11, 2011-12 and 2012-13 towards their commission. 23. So, from the oral and documentary evidence that is available on record, a strong prima facie case is made out against the petitioners regarding their complicity in entering into a criminal conspiracy with accused Nos.3 to 17, who are the agents/brokers in fabricating the office copies of the policy schedules to create evidence as if the business was secured by the agents and regarding falsification of the official records and in cheating the I.O.C.L. causing huge loss to a tune of Rs.77,26,305/- by illegally releasing the amount relating to the commission to the agents. The said evidence is sufficient to frame charges against all the accused for the aforesaid offences and to try them for the said offences. 24. The said evidence is sufficient to frame charges against all the accused for the aforesaid offences and to try them for the said offences. 24. The law is now fairly well-settled that for the purpose of framing charges, the Court has to see only whether there is prima facie case against the accused with sufficient evidence to try them for the said offences or not. If the Court finds that there is prima facie case and evidence against the accused as per the material produced by the prosecution along with the charge-sheet, the Court has to frame the charges against them for the said offences and leave the rest to be decided during the course of trial and in the final adjudication of the case. At the stage of framing charges, the Court cannot subject the evidence produced by the prosecution to strict judicial scrutiny or appreciate the evidence on record to decide the veracity or otherwise of the said evidence. That is the task to be taken-up by the trial Court in the final adjudication of the case. Therefore, in the said facts and circumstances of the case, the three judgments, viz., Dipakbhai Jagdishchandra Patel v. State of Gujarat, 2019 SCCOnLine(SC) 588 ; Sajjan Kumar v. C.B.I., (2010) 9 SCC 368 and B.S. Neelakanta v. State of A.P., (2014) CriLJ 3752 = 2014 (2) ALT (Cri) 237 = 2014 (1) ALD (Cri) 611, relied on by the learned counsel for the petitioners, have no application to the facts of the present case and they are not of any avail to the petitioners herein in the facts and circumstances of the present case. 25. The learned Judge in the impugned orders clearly held that the listed document Nos.12 to 39 show that the insurance business was directly awarded by the Tobacco Board to the O.I.C.L., Divisional Office-II, Guntur, for the years 2010-11, 2011-12 and 2012-13 and listed document Nos.40 to 45 show that agent commission was remitted though the business was secured directly without the intervention of the agents of the O.I.C.L. and the statements of LWs.1 to 21 show involvement of accused No.1 in releasing commission to the agents, who are accused Nos.3 to 17, fraudulently. Therefore, it cannot be said that the learned Judge erred in dismissing the petitions and in declining to discharge the petitioners from the said case. 26. Therefore, it cannot be said that the learned Judge erred in dismissing the petitions and in declining to discharge the petitioners from the said case. 26. Upon considering the material on record, this Court is also of the considered view that there is sufficient and prima facie evidence on record to establish that though the business of issuing insurance policies to the registered tobacco growers was directly given by the Tobacco Board to the O.I.C.L., after calling for tenders, that a fraud was played in releasing Rs.77,26,305/- towards commission to the agents by fraudulently fabricating the records to that effect showing that the business was secured through the agents-accused Nos.3 to 17. 27. Therefore, the impugned orders of the trial Court are perfectly sustainable under law and they call for no interference in these Criminal Revision Cases. 28. In the result, both the Criminal Revision Cases are dismissed. 29. Consequently, miscellaneous applications, pending if any, shall also stand closed.