CRL.A. No. 447 of 2001 and CRL.A. No. 448 of 2001, High Court of Kerala at Ernakulam

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE B.SUDHEENDRA KUMAR** **FRIDAY,THE 05TH DAY OF OCTOBER 2018 / 13TH ASWINA, 1940** ## **CRL.A.No. 447 of 2001** **AGAINST THE ORDER/JUDGMENT IN CC 11/1994 of SPL.C SPE/CBII&3 ADD.DC.ADD MACT,EKM DATED 30-04-2001** ## **APPELLANT/S:** **1 B.SREEKALA PROPRETRIX, M/S. RADHA CASHEW TRADERS, QUILON.** **2 T.K. MURALIDHARAN PILLAI, ANUPAM, AYATHIL,QUILON-17. BY ADV. SRI.S.RAJEEV** ## **RESPONDENT/S:** **THE SUPDT. OF POLICE SPECIAL POLICE ESTABLISHMENT C.B.I,COCHIN17,REP.BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM-682031.** **BY ADVS.** **SRI.P.CHANDRASEKHARA PILLAI, C.B.I. SRI.M.V.S.NAMBOOTHIRYSC C.B.I. SRI.P.CHANDRASEKHARA PILLAI C.B.I. SRI.S.SREEKUMAR SC FOR CBI** ## **OTHER PRESENT:** **SRI. SASTHAMANGALAM S AJITHKUMAR-SPL.PP CBI** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 05.10.2018, ALONG WITH CRL.A.448/2001, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **CRL.A.No.447 AND 448/2001** -2- ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE B.SUDHEENDRA KUMAR FRIDAY,THE 05TH DAY OF OCTOBER 2018 / 13TH ASWINA, 1940 CRL.A.No. 448 of 2001** **C.C.NO.11 of 1994 OF SPECIAL JUDGE (SPE/CBI) -1, ERNAKULAM** **APPELLANT/S:** **M.S.JOHAR, 183, PALAIKAL COLONY INDORE, MADHYAPRADESH, (FORMER MANAGER, PUNJAB AND SIND BANK QUILON) BY ADVS. SRI.RAJU JOSEPH (SR.) SRI.TONY PETTAH** **RESPONDENT/S:** **THE SUPDT. OF POLICE SPECIAL POLICE ESTABLISHMENT CBI, KOCHI - 17. BY ADVS. SRI.P.CHANDRASEKHARA PILLAI, C.B.I. SRI.M.V.S.NAMBOOTHIRYSC C.B.I. SRI.P.CHANDRASEKHARA PILLAI C.B.I. SRI.S.SREEKUMAR SC FOR CBI** **OTHER PRESENT:** **SRI. SASTHAMANGALAM S AJITHKUMAR-SPL PP CBI** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 05.10.2018, ALONG WITH CRL.A.447/2001, THE COURT ON THE** ## **CRL.A.No.447 AND 448/2001** -3- ## **SAME DAY PASSED THE FOLLOWING:** ## **JUDGMENT** The appellant in Crl.A.No. 448 of 2001 is the first accused and the appellants in Crl.Appeal No.447 of 2001 are the 2[nd] accused and the 3[rd] accused in C.C. No.11 of 1994 on the files of the court of the Special Judge (SPE/CBI)-I, Ernakulam. 2. The prosecution allegations can be briefly stated as follows:- The accused Nos.1 and 3 conspired with the absconding accused, namely, Mohinder Pal Singh @ M.P.Sing and pursuant to the said conspiracy, the 2[nd] accused obtained a packing credit facility of Rs.24,00,000/- ## **CRL.A.No.447 AND 448/2001** from the Punjab and Sind Bank, Quilon, during the year 1988-89, suppressing the material facts, furnishing false details and concealing her liability as a guarantor for the loan availed by her husband, who is the third accused herein, from the Corporation Bank, Quilon by producing a false confidential report. The further allegation is that the first accused, who took charge as the Manager of the Punjab and Sind Bank, Quilon branch on 22.6.1989, allowed the 2[nd] accused to avail packing credit facility without a valid letter of credit in packing credit account numbers 2/89, 3/89 and 4/90 contrary to the office instructions. The present first accused also allowed the 2[nd] accused to enjoy the facilities to the tune of Rs.4,00,000/-, ## **CRL.A.No.447 AND 448/2001** -5- after the period of expiry as per Ext.P91 letter of credit. The present first accused also allowed the 2[nd] accused to avail packing credit facility without any proper coverage of the Export Credit Guarantee Corporation (for short 'ECGC'). It is further alleged that while the present 1[st] accused was working as the Manager of Cochin Branch of Punjab and Sind Bank from 22.6.1990 onwards, he conspired with accused No.2 to 4 and pursuant to the said conspiracy, the present first accused issued Ext.P53 Bank Guarantee for Rs.30,00,000/- in favour of M/s.Fenner India Ltd, Madurai on 24.4.1991 on behalf of a nonexistent firm, namely, M/s.Vijaya Exports Limited of the 4[th] accused Vijaya Kumar. On the strength of the said bank ## **CRL.A.No.447 AND 448/2001** -6guarantee, M/s.Fenner India Ltd advanced Rs.20,00,000/to the 4[th] accused for the purpose of exporting cashew, which was withdrawn by accused Nos.2, 3 and 4 and thereafter, M/s.Vijaya Exports Ltd failed to export cashew and hence, M/s.Fenner India Ltd invoked that bank guarantee and the bank had to pay Rs.40,00,000/- to them. 3. On the said allegations, the crime was registered. After the investigation, the final report was filed before the court by PW22 for the offences punishable under Sections 120B, 420, 468, 471 and 477A IPC and Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act 1998 (for short 'the PC Act') against the present accused persons and the absconding accused Mohinder Pal Singh. ## **CRL.A.No.447 AND 448/2001** 4. After the legal formalities, the trial was conducted. In the trial, the prosecution examined PW1 to PW22 and marked Exts.P1 to P115. On the side of the defence, Exts.D1 to D4 were marked. After evaluating the evidence, the court below convicted all the accused for the offences under Sections 420 and 120B IPC and sentenced each of them to rigorous imprisonment for three years each and a fine of Rs.50,000/- each, with a default clause for rigorous imprisonment for three months each under Section 420 IPC and rigorous imprisonment for three years each under Section 120B IPC. The first accused was further convicted under Section 477A IPC and Section 13(1)(d) read with Section 13(2) of the P.C. Act and he was sentenced to ## **CRL.A.No.447 AND 448/2001** -8- rigorous imprisonment for three years under Section 477A IPC and rigorous imprisonment for three years under Section 13(1)(d) read with Section 13(2) of the PC Act. The third accused was further convicted under Sections 468 and 471 IPC and he was sentenced to rigorous imprisonment for three years under Section 468 IPC. No separate sentence was awarded under Section 471 IPC. 5. Heard. 6. The learned counsel for the appellants argued that there is absolutely no material before the court to connect the appellants with the commission of the offence and hence, the conviction and sentence passed by the court below cannot be sustained. ## **CRL.A.No.447 AND 448/2001** -9- 7. PW1 was the Assistant Manager of the Punjab and Sind Bank during the period 1989 - 1990. PW1 stated that the Packing Credit Advance was sanctioned to the 2[nd] accused by the absconding accused Mohinder Pal Singh on the strength of Ext.P21 confidential report dated 11.3.1989 allegedly issued from the Corporation Bank, Quilon. PW8 was the peon of Corporation Bank, Quilon, during 19841998. PW8 stated that the 3[rd] accused had a bank account with his bank under the name and style M/s.Murali Cashew Company. PW8 further stated that on a day in the year 1989, the third accused requested for a copy of the letter pad of the bank stating that the said letter pad was required for the purpose of income tax. The third accused also ## **CRL.A.No.447 AND 448/2001** -10- requested for affixing the seal of the bank on the said letter pad. Accordingly, he affixed the old seal of the bank on a letter pad of the bank and handed over the said letter pad to the third accused. 8. We will now consider as to whether the prosecution could establish that Ext.P21 was fraudulently created by the third accused mis-utilising the letter pad handed over by PW8 to the third accused. During the examination of PW8, PW8 did not state that Ext.P21 was the letter pad handed over by PW8 to the third accused. However, the court below, after evaluating the evidence of PW8, came to the conclusion that Ext.P21 was the letter pad handed over by PW8 to the third accused. In order to appreciate the said ## **CRL.A.No.447 AND 448/2001** -11- aspect, it is necessary to go through the evidence of PW3 to PW5 and PW12. The seal in Ext.P21 was marked as Ext.P21(a). PW3 was the officer of Quilon branch of the Corporation Bank during the period 1987-1990, who denied the suggestion that Ext.P21(a) was the seal of the Corporation Bank. PW4 was the Manager of Quilon branch of the Corporation Bank during the period 19861989. PW4 stated that he could not state as to whether Ext.P21(a) seal was genuine or not. PW5 was the branch manager of Quilon branch of Corporation Bank during the period from May 1999 to 1991. PW5 stated that PW5 could not state as to whether Ext.P21(a) seal was the seal of the Corporation Bank or not. PW12 was the sub-Manager ## **CRL.A.No.447 AND 448/2001** of Quilon branch of the Corporation Bank during the period 1987-1991. PW12 stated that Ext.P21(a) seal was not there in the bank to his knowledge. He further stated that the facsimile of the seal of the bank was either “Manager” or “Manager/Accountant” and there was no seal in the bank having the facsimile “Officer/Manager”. Thus, PW3 to PW5 and PW12, who were the Managers of the Corporation Bank during different period, could not identify Ext.P21(a) seal in Ext.P21 as the seal of the Corporation Bank, Quilon. There is also no other evidence before the court to show that Ext.P21(a) seal in Ext.P21 was the seal of the Corporation Bank. The evidence of PW15 coupled with Ext. P105 would show that it was not ## **CRL.A.No.447 AND 448/2001** -13- possible to express any opinion with regard to the signature in Ext. P21. PW15 had compared the admitted and specimen signature of the 3[rd] accused with the disputed signature in Ext. P21 and thereafter, PW1 had given the above said opinion as per Ext.P105 report. There is no other evidence connecting the 3[rd] accused with Ext. P21. Therefore, it cannot be said that the prosecution could establish that the letter pad handed over by PW8 to the third accused had been converted as Ext.P21 by the third accused. There is also absolutely no evidence before the court to prove that the 3[rd] accused had handed over Ext.P21 to the Bank. The evidence adduced by the prosecution is silent as to who received Ext.P21. In view ## **CRL.A.No.447 AND 448/2001** -14- of the above reasons, in the absence of any convincing evidence, it cannot be said that the letter pad with the seal handed over to the third accused by PW8 had been converted as Ext.P21. 9. Ext.P8 dated 3.5.1989 is stated to be the copy of the confidential report sent from the Corporation Bank, Quilon. PW12, who was the then sub-Manager of Corporation Bank stated that Ext.P8 dated 3.5.1989 was sent to Punjab and Sind Bank by him stating that the second accused was having the liability with Corporation Bank as guarantor to the credit facilities availed by the third accused for M/s.Murali Cashew Company. Ext.P8 would further state that M/s.Murali Cashew Company was ## **CRL.A.No.447 AND 448/2001** -15- in the Caution (Specific Approval) List of exporters issued by ECGC. Ext.P8 was despatched on 3.5.1989 as per Ext.P68(a) inward and outward register of the Corporation Bank. Ext.P69(a) is the acknowledgment made by a clerk of Punjab and Sind Bank in Ext.P69 local delivery book. PW21 was the clerk of Punjab and Sind Bank during the relevant period. He stated that he received Ext.P8 as the senior most Clerk of the Bank. PW21 admitted his signature in Ext.P69(a). PW21 further stated that he handed over Ext.P8 to the absconding accused M.P. Singh. PW22 was the Investigating Officer. He stated that Ext.P8 was destroyed by the said M.P. Singh. It is not disputed that the loan was originally sanctioned as per Ext.P22 ## **CRL.A.No.447 AND 448/2001** -16- sanction order on the recommendation of the absconding accused M.P. Singh on the strength of Ext.P21 confidential report. During the above said period, the present first accused M. S. Johar was not in the picture. The evidence of PW21 would clearly show that he had handed over Ext.P8 to the absconding accused M.P. Singh. The evidence of PW22 would clearly show that the absconding accused M.P. Singh had destroyed Ext.P8. In view of the above reasons, the subsequent officers of the Punjab and Sind Bank, including the present first accused, had no occasion to see Ext.P8 even as per the prosecution evidence. 10. The present first accused took charge as the ## **CRL.A.No.447 AND 448/2001** -17- Manager of Quilon Branch of Punjab and Sind Bank on 26.2.1989. It is alleged that even though the letter of credit expired on 15.9.1989, he released Rs.4.1 lakh on 26.4.1990, which would show that the present first accused, without having the letter of valid credit in packing credit account number allowed the 2[nd] accused to avail packing credit facilities. Ext.P50(a) relates to bank credit account No.2/89. Ext.P91 dated 12.8.89 is the letter of credit relating to the above said account. Ext.P91 was valid only up to 15.9.1989. It is seen from Ext.P50(a) that an amount of Rs.4.1 lakhs was debited to Ext.P50(a) on 26.4.1990 as per Ext.P92 voucher. PW1 and PW11 also stated about the advance made to the 2[nd] accused on 26.4.1990. The ## **CRL.A.No.447 AND 448/2001** prosecution would allege that the above said amount of Rs.4.1 lakhs should not have been released to the 2[nd] accused after 15.9.1989, which was the period of expiry as per Ext.P91 letter of credit. PW1 admitted that the above said advance of Rs.4.1 lakh was made by him. However, PW1 stated that it was only as per the direction of the first accused to release the bank credit loan of M/s.Radha Cashew Traders, even if the limit would exceed by three or four lakhs, that he released the said amount of Rs. 4.1 lakh to the second accused. 11. Ext.P50(b) relates to the packing credit account No.3/89, which corresponds to Ext.P93 letter of credit dated 10.11.1989. Ext.P93 was valid upto 31.12.1989. It is ## **CRL.A.No.447 AND 448/2001** -19- seen from Ext.P50(b) that Rs.8,000/-, Rs.2,00,000/-, Rs.25,000/- and 1,25,000/- were debited to the said account on 2.9.1989 as per Exts.P96, P98 and P100 credit slips, for crediting the amount in the current account of the second accused. On 6.9.1989, an amount of Rs.1,00,000/- was debited to Ext.P50(b) as per Ext.P101 debit slip. Ext.P93 is dated 10.11.1989. Therefore, it is clear that the above said amount had been debited and credited before Ext.P93 letter of credit came into force on 10.11.1989. PW1 and PW11 proved the above facts. PW1 admitted that he had advanced the said amount as per the request of the first accused. 12. Ext.P50(c) is the packing credit account No.4/90. ## **CRL.A.No.447 AND 448/2001** -20- It is seen from Ext.P50(c) that Rs.2,00,000/- was released on 25.2.1990, Rs.1,00,000/- was released on 5.3.1990, Rs.1,06,000/ was released on 6.3.1990 and Rs.1,00,000/was released on 14.3.1990. PW1 stated that PW1 had advanced the said amount as per the direction of the first accused. PW1 himself stated that the above said amount had been released before the corresponding letter of credit had come into force. 13. It is evident from Ext.P50(a) that the amount of Rs.4.1 lakh was released on 26.4.1990 to the 2[nd] accused after the expiry of Ext.P91 letter of credit on 15.9.1989. So also, in the packing credit account Nos.3/89 and 4/90, which relate to Exts.P50(b) and 50(c), the amounts were ## **CRL.A.No.447 AND 448/2001** -21- released to the second accused even before the letter of credit came into force. In Ext.P22 order dated 1.5.89, which was the order whereby the Head office of Foreign Exchange Department of Punjab and Sind Bank sanctioned packing credit facility to M/s.Radha Cashew Traders, it was specifically stated that the packing credit amount could be released only if the parties had valid letter of credit. PW1 stated that the handwriting pertaining to the above entries in Ext.P50(a) to Ext.P50(c) was his own handwriting. PW1 further stated that he advanced the amounts covered by Ext.P50(a) to Ext.P50(c) mentioned above only on the direction of the first accused to him as per Ext.P51 letter. The court below relied on the evidence ## **CRL.A.No.447 AND 448/2001** -22- of PW1 and Ext.P51 letter and held that even though PW1 had released the said advance, it was done only as per the direction of the first accused. Accordingly, the court below found that the first accused released the above said advance to the second accused contrary to the terms in Ext.P22 sanction order. 14. At this juncture, it is very relevant to extract Ext.P51, which is extracted hereunder:- “Mr.Mathew J Panjikaran 31.3.1990 Asst.Manager Punjab and Sind Bank Quilon. Dear Sir, As I will be going out of station for ## **CRL.A.No.447 AND 448/2001** -23- some days, permission is hereby given to you to issue draft in favour of capex, if Radha Cashew Traders approaches you for payment for taking delivery of the alloted quota of raw cashew from the cashew Corporation, even if the limit is exceeded by three or four lacs. Sd/-” 15. PW1 clearly stated that Ext.P51 was written by PW1. PW1 admitted that PW1 used to release the amount on previous occasions even without having any authorisation from the first accused. PW1 did not state as to why Ext.P51 was necessitated. The first accused stated during his examination under Section 313 Cr.P.C. that PW1 obtained his signature in Ext.P51 during the course of ## **CRL.A.No.447 AND 448/2001** -24- signing routine letters and that he did not intend to give any such letter to PW1. The need for issuing Ext.P51 is also not discernible from the evidence of PW1. Ext.P51 is dated 31.3.90. It can be seen from Ext.P50(c) that Rs. 2 lakh was released on 25-2-1990, Rs.1,00,000/- was released on 5.3.1990, Rs.1,06,000/- was released on 6.3.1990 and Rs.1,00,000/-was released on 14.3.1990. All the said entries were in the handwriting of PW1. The said amounts were released before the corresponding letter of credit came into operation, even as per the evidence of PW1. Ext.P51 was dated 31-3-1990, which was subsequent to the date of the above said transactions. Therefore, by no stretch of imagination, it can be accepted that PW1 ## **CRL.A.No.447 AND 448/2001** -25- released the advance referred to in Ext.P50(c) as per the direction of the first accused as per Ext.P51 letter, as stated by PW1. No other justification had been given by PW1 as to why he released the amount before the letter of credit came into force. 16. PW1 credited an amount of Rs.8,000/-, Rs.2,00,000/-, Rs.25,000/- and Rs.1,25,000/- on 2.9.1989 and an amount of Rs.1,00,000/- on 6.9.1989 as per Ext.P50(b). The said amounts were credited before Ext.P93 letter of credit came into force on 10.11.1989. All the said entries were in the handwriting of PW1. Ext.P51 came into existence only after the above said transactions. Therefore, it cannot be said that PW1 released the above ## **CRL.A.No.447 AND 448/2001** amounts as per the direction of the first accused as per Ext.P51. 17. It is also to be noted that an amount of Rs.4.1 lakh was released on 26.4.1990 to the second accused as is evident from Ext.P50(a) after the expiry of Ext.P91 letter of credit on 15.9.1989. PW1 admitted that the above said advance of Rs.4.1 lakh was made by him. However, PW1 stated that it was only as per the direction of the first accused that he released the said amount. Having gone through the evidence of PW1 discussed above, in the light of the explanation given by the first accused, I am not able to accept the evidence of PW1 that Ext.P51 was given by the first accused as stated by PW1. The probabilities ## **CRL.A.No.447 AND 448/2001** -27- available in this case would impel this court to hold that the contention of the first accused, that the signature in Ext.P51 was obtained by PW1 from the first accused during the course of signing routine letters, can not be ignored. Even on assuming that Ext.P51 was genuine, even then there was no justification in advancing the amount on 26.4.1990 as seen in Ext.P50(a) after the expiry of Ext.P91 letter of credit on 15.9.1989, as Ext.P51 letter did not authorise PW1 to advance the amount after the expiry of the letter of credit. Ext.P51 only granted permission to PW1 to issue draft even if the limit exceeded by Rs. 3 or 4 lakhs. In none of the cases covered by Exts.P50(a), P50(b) or Ext.P50(c) mentioned above, the limit was exceeded. Therefore, on ## **CRL.A.No.447 AND 448/2001** -28- that reason also, there was no justification for PW1 in advancing the amount covered by Exts.P50(a), P50(b) and P50(c). That apart, as already mentioned above, the transactions referred to in Exts.P50(b) and P50(c) were made prior to the date of Ext.P51. It is alleged that an amount of Rs. 4.1 lakh was released on 26.4.1990 as per Ext.P50(a) after the period of expiry as per Ext.P91 letter of credit. Ext.P51 letter did not authorise PW1 to release the amount after the period of expiry as per Ext.P91 letter of credit. It was mandatory as per Ext.P22 order according sanction that before releasing the amount, there should be a valid letter of credit. Ext.P51 only granted permission to PW1 to issue draft even if the limit exceeded by Rs. 3 or 4 ## **CRL.A.No.447 AND 448/2001** -29- lakhs. The limit was not exceeded in the transaction covered by Ext.P50(a) also. Therefore, there is no logic in the evidence of PW1 that PW1 released the amounts on the request of the first accused. In view of the above reasons, the finding of the court below that the release of the amount covered by Exts.P50(a) to P50(c) by PW1 was as instructed by the present first accused M.S. Johar is against the facts and evidence available in this case. 18. If at all the first accused allowed the second accused to avail packing credit facility subsequent to his taking over the charge as the Manager of Punjab and Sind Bank, Quilon, he cannot be blamed for that also because he was not aware of Ext.P8 for the reasons already stated ## **CRL.A.No.447 AND 448/2001** above. However, the evidence on record would clearly show that all the above said advance had been made by PW1 and the first accused had no role in allowing the second accused to avail packing credit facility without a valid letter of credit or proper coverage of ECGC. It is clear from Ext.P22 that the coverage of ECGC is necessary only if the packing credit advance exceeds Rs. 20 lakhs. In this case, the packing credit advance did not exceed Rs. 20 lakhs. Therefore, there was hardly any need in this case to obtain the coverage of ECGC. It is clear from the evidence of PW9, who was the Assistant Manager of ECGC from 1984 to 1990, that the names of the parties mentioned in the specific approval list (caution list) used to be published in ## **CRL.A.No.447 AND 448/2001** -31circulars. It was published only in Ext.P90 circular dated 25-11-1998 that Radha Cashew Traders, the sister concern of Murali Cashew Company, was placed in specific approval list(caution list). Ext.P90 circular was published only on 17.4.1990 as per the evidence of PW9. Therefore, there can be no doubt that nobody had the knowledge that the name of Radha Cashew Traders was included in the caution list by ECGC till 17.4.1990. The Head office made communication to the Punjab and Sind Bank, Quilon with regard to the inclusion of Radha Cashew Traders in the caution list as per Ext.P44 dated 11-12-1990. PW9 stated that no intimation with regard to the said circular was given to Punjab and Sind Bank, Quilon from his office. ## **CRL.A.No.447 AND 448/2001** -32- Therefore, there was no occasion for the first accused to get information till the Head office made communication to the Punjab and Sind Bank, Quilon with regard to the inclusion of Radha Cashew Traders in the caution list as per Ext.P44 dated 11-12-1990. 19. The above discussion would make it clear that there is absolutely no material before the court to connect the present first accused with the irregularities in advancing the amount mentioned in Exts. P50 (a) to P50 (c) or granting packing credit advance to Radha Cashew Traders. 20. Now the question to be considered is as to whether the 2[nd] or the 3[rd] accused committed any offence. ## **CRL.A.No.447 AND 448/2001** -33- Ext. P5 is the application submitted by the 2[nd] accused for granting packing credit facility to the tune of Rs. 25 lakhs. Ext. P5 was forwarded by the absconding accused M.P.Singh to the Head office of Punjab and Sind Bank along with Ext. P6 recommendation. It is in the evidence of PW1 that along with Ext. P6, Ext. P21 confidential report was also forwarded to the Head office as instructed by the absconding accused M.P.Singh. It is true that Ext. P21 is not a genuine document. PW8 stated that he had handed over a letter pad of the Corporation bank with the seal of the bank to the 3[rd] accused as requested by the third accused. The prosecution case is that the said letter pad had been converted as Ext. P21. However, this court has ## **CRL.A.No.447 AND 448/2001** -34- already found in the foregoing paragraphs that the prosecution could not establish that the letter pad handed over by PW8 to the third accused had been converted as Ext.P21 by the third accused. There is absolutely no evidence before the court as to when Ext. P21 was received in the bank. There is also no evidence as to who handed over Ext. P21 to the bank. There is also no evidence as to who received Ext. P21 in the Bank. Ext. P5 did not contain any false statement. The 2[nd] accused filed Ext. P5 application before the Panjab and Sind Bank for starting an account for Radha Cashew Traders. It was stated in Ext.P5 that Radha Cashew Traders was not having any account with any other bank. Thus, the facts stated in column ## **CRL.A.No.447 AND 448/2001** number six of Ext. P5 are not false, as Radha Cashew Traders was a new firm having no previous transaction with any bank eventhough the 2[nd] accused, who was the Proprietor of the said firm, was the guarantor for Murali Cashew Corporation for availing Packing Credit Facility from Corporation Bank. In view of the above reasons, it cannot be said that the 2[nd] accused had obtained packing Credit advance from the bank, furnishing false materials and concealing the facts. There is absolutely no evidence before the court to show that any of the details stated in Ext. P5 was false. There is also nothing to connect the 2[nd] accused with Ext. P21. In view of the above reasons, it cannot be said that the finding by the court below against ## **CRL.A.No.447 AND 448/2001** -36- the 2[nd] accused, in respect of Ext. P5 application and the consequent obtaining of packing credit advance from the bank, is correct. 21. It is alleged that while the present first accused was working as the Manager of Cochin Branch of Punjab and Sind Bank, he conspired with accused Nos.2 to 4 and pursuant to the said conspiracy, he issued Ext.P53 bank guarantee dated 24.4.1991 for Rs. 30 lakhs in favour of M/s.Fenner India Limited, Madurai on behalf of a nonexistent firm, namely, M/s.Vijaya Exports of the 4[th] accused and pursuant to the said bank guarantee, M/s. Fenner India Limited advanced Rs. 20 lakhs to the 4[th] accused, which was withdrawn by the 4[th] accused and ## **CRL.A.No.447 AND 448/2001** -37- subsequently, a portion of the said amount was withdrawn by accused Nos.2 and 3 by way of cheques issued by the 4[th] accused. Thereafter, M/s.Vijaya Exports Limited failed to export cashew. Therefore, M/s.Fenner India Limited invoked bank guarantee and the Bank had to pay Rs. 40 lakhs to them. The issuance of Ext.P53 Bank guarantee by the present first accused as the Manager of Punjab and Sind Bank Cochin and the advancement of an amount of Rs. 20 lakhs by M/s. Fenner India Limited to M/s.Vijaya Exports on the basis of Ext.P53 are admitted by the first accused. The said facts are also proved through the evidence of PW16 and PW1. 22. The first question to be considered is as to ## **CRL.A.No.447 AND 448/2001** -38- whether M/s.Vijaya Exports was in existence during the period of issuing Ext.P53. The court below relied on the evidence of PW16 and PW17 and held that M/s.Vijaya Exports Limited was a non-existent bogus firm. PW16 stated that he joined Cochin branch as the Manager during July 1992. PW16 further stated that the address of Vijaya Exports Limited shown in Ext.P53 is 23/393, Panampilly Nagar, Cochin 16. PW16 also stated that he went there and verified. However, there was no such office there. Ext.P57 is a letter issued by Vijaya Exports Limited to the Manager of Punjab and Sind Bank, Ernakulamm, which was marked by the prosecution through PW1. Ext.P57 is the letter through which Vijaya Exports Limited informed the ## **CRL.A.No.447 AND 448/2001** Manager of Punjab and Sind Bank that the Head office of Vijaya Exports Limited at Cochin had been closed and they shifted all their office works to 'Anupam', Quilon-17. It is further stated in Ext.P57 that the communications, if any, must be sent to the address shown in Ext.P57. Ext.P57 is dated 23.1.1992. The evidence of PW16 is that he visited the building having the address 23/393, Panampilly Nagar, Cochin 16, shown in Ext.P53, after he had taken charge as the Manager of Cochin Branch. He had taken charge only in July 1992. Therefore, by that time, the Head office of Vijaya Exports Limited at Cochin had been closed and they shifted to the new premises at Quilon. Therefore, the evidence of PW16 cannot be accepted to hold that ## **CRL.A.No.447 AND 448/2001** -40- Vijaya Exports Limited is a non-existent firm. PW14 was the former Manager of Fenner India Ltd, Madurai with whom Vijaya Exports Limited made Ext.102 agreement. PW14 fully supported the prosecution case. However, PW14 did not state that Vijaya Exports was not in existence during the relevant period. No question was also asked to PW14 as to whether Vijaya Exports was a non-existent firm or not. PW14 was the best person to state about the existence of Vijaya Exports, particularly when there is no allegation that Fenner India Ltd had conspired with Vijaya Exports Ltd. for creating Ext.P102. 23. PW17 is a person retired from Cochin Shipyard. His evidence would show that he was not having much ## **CRL.A.No.447 AND 448/2001** -41knowledge with regard to the details of the activities going on in the up-stair portion of his building. The building No of PW17 is 27/393, whereas the Vijaya Exports was housed in 23/393. There is no evidence before the court to show that building No.23/393 was situated in the first floor of the building, where PW17 was residing. Ext.D4 is the ledger extract of the account of Vijaya Exports, which would also clearly show that Vijaya Exports was not a nonexistent firm. Otherwise, they could not have opened the account in Punjab and Sind Bank, particularly when there is no allegation that the account pertaining to Ext.D4 was opened in the name of Vijaya Exports by producing any fraudulent document. Ext.P115 is the original application ## **CRL.A.No.447 AND 448/2001** -42- filed by Punjab and Sind Bank before the Debt Recovery Tribunal, Chennai, wherein the address in Ext.P57 is shown as the address of Vijaya Exports. In view of the above reasons, the finding by the court below that the prosecution could prove that Vijaya Exports was a nonexistent firm, is against the evidence available in this case. For the said reasons, the allegation that the first accused issued Ext.P53 Bank guarantee on the request of a nonexistent firm, cannot be correct. 24. It was stated by PW16 that no application or voucher was found in the bank to support Ext.P53 bank guarantee. The present first accused stated, when he was examined under Section 313 Cr.P.C., that the application ## **CRL.A.No.447 AND 448/2001** and the voucher were there in the bank PW16 clearly stated that Ext.P53 was issued on the basis of Ext.P102 agreement. Ext.P53 specifically mentions about Ext.P102 agreement. PW22 did not conduct any investigation as to whether any application was filed or not for obtaining Ext.P53. His evidence is silent with regard to the same. No person working in the office of the first accused during the relevant period was also questioned by PW22 to ascertain as to whether any application was submitted by the 4[th] accused for obtaining Ext.P53 bank guarantee. It is true that PW16 stated that no application was found in the office of PW16. The learned counsel for the first accused has submitted that since the first accused was not in service ## **CRL.A.No.447 AND 448/2001** -44- of the bank, the first accused was not in a position to produce evidence to show that the application and the voucher were available in the Bank. It is in the evidence that the litigation in respect of Ext.P53 was commenced in 1992 itself. The submission of the learned counsel that the application and the voucher pertaining to Ext.P53 might have been produced before the court in connection with the litigation in respect of Ext.P53, appears to be correct, particularly when it appears that the parties proceeded with the litigation up to the Hon'ble Supreme Court. The evidence on record would show that PW16 had given evidence casually and irresponsibly that the firm Vijaya Exports was a non-existent firm, even though PW16 was ## **CRL.A.No.447 AND 448/2001** -45- aware of Ext.P57 and Ext.P115 at least at the time of giving evidence before the court. In view of the above shabby evidence of PW16, I am not inclined to accept the evidence of PW16 in this regard. PW16 did not conduct any enquiry to ascertain as to whether the application form and the voucher were produced before the court in connection with the litigation pertaining to Ext.P53. Therefore, merely because PW1 was not able to find out any application or voucher in the bank leading to the issuance of Ext. P53, it cannot be said that Ext.P53 was issued without submitting any application for the same. It is also to be noted that Ext. P102 would show the requirement of Vijaya Exports to give bank guarantee in ## **CRL.A.No.447 AND 448/2001** favour of Fenner India Ltd. There is also a condition in Ext. P53 that Ext. P53 would be in force only if Vijaya Exports deposited an amount of Rs. 30 lakhs with the bank. PW16 stated that when Fenner India Ltd. tried to invoke Ext. P16 bank guarantee, the bank resisted it on the ground that Ext. P53 guarantee was not in force. It is in the evidence of PW16 that the Cochin branch of the Bank had obtained legal opinion regarding the validity of Ext. P53 and the Advocate of the Bank as well as the Head office gave the advise that Ext. P53 bank guarantee had not come into force. The above evidence of PW1 would show that the contention of the first accused that he issued Ext. P53 bank guarantee bonafide, believing that the said bank ## **CRL.A.No.447 AND 448/2001** -47- guarantee would come into force only on deposit of Rs. 30 lakhs by Vijaya Exports with the bank, appears to be probable. Moreover, the evidence on record would show that sufficient security was also furnished by Vijaya Exports. 25. In view of the above reasons, I am of the view that the prosecution could not establish that the first accused issued Ext. P53 on the request of a fictitious firm, without complying the legal formalities. It may be true that some of the legal formalities might not have been strictly complied with while issuing Ext. P53. However, violation of legal formalities ipso facto will not lead to the inference that the public servant committed criminal misconduct in ## **CRL.A.No.447 AND 448/2001** -48- the absence of any evidence in that regard. The 4[th] accused is not alive. Therefore, the appeal filed against the 4[th] accused had been disposed of by this court separately in view of the judgment of the Full court in Pazhani v. State of Kerala [2017 (1) KHC 173]. Therefore, there is no need to mention about the evidence against A4 in this judgment. So far as A2 and A3 are concerned, the only evidence is that they collected the amount pursuant to the cheques issued by the fourth accused. The prosecution has no case that the 2[nd] and the 3[rd] accused had withdrawn the amount directly from Fenner India Ltd. An amount of Rs. 20 lakh was deposited by Fenner India Ltd. in the account of the fourth accused. In the absence of any convincing evidence, ## **CRL.A.No.447 AND 448/2001** -49- it cannot be said that the 2[nd] and the 3[rd] accused had received amount through cheques issued by the fourth accused in pursuance to the conspiracy by accused Nos. 2 to 4 as alleged by the prosecution. In view of the above reasons, accused Nos. 2 and 3 are entitled to the benefit of doubt in this matter. 26. Having meticulously scrutinized the evidence on record, I am of the view that the prosecution failed to establish that the appellants committed any of the offences including the conspiracy to commit the offences charged against them. In the said circumstances, the conviction and sentence passed by the court below cannot be sustained and consequently, I set aside the same. ## **CRL.A.No.447 AND 448/2001** -50- In the result, these appeals stand allowed, setting aside the conviction and sentence passed by the courts below against the appellants and the appellants stand acquitted of all the offences. The bail bonds of the appellants stand discharged and the appellants are set at liberty. ## SD **B. SUDHEENDRA KUMAR, JUDGE** . dl/ **==> picture [336 x 17] intentionally omitted <==**