K. D. Sebastian and others v. P. Kunhikannan and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.M.BABU FRIDAY, THE 7TH DAY OF JULY 2017/16TH ASHADHA, 1939 Crl.MC.No. 4469 of 2013 ------------------------------CMP.849/2012 IN C.C.56/2008 OF THE ENQUIRY COMMISSIONER & SPECIAL JUDGE, KOZHIKODE ## PETITIONERS/RESPONDENTS/ACCUSED: --------------------------------------------------------- 1. K.D.SEBASTIAN, S/O.DEVASSIA, KOTTARTHIL HOUSE, CHEMPERY P.O., KANNUR DISTRICT, FORMERLY PART TIME ADMINISTRATOR, NEDIYENGA SERVICE CO-OPERATIVE BANK, CHEMPANTHOTTY. 2. M.V.RAGHAVAN, S/O.KRISHNAN NAMBIAR, MARUTHIYODAM VEETTIL, NEDIYENGA AMSOM DESOM, FORMER ASSISTANT SECRETARY, NEDIYENGA SERVICE CO-OPERATIVE BANK, CHEMPANTHOTTY. 3. E.P.THAMPAN, S/O.KUNHIRAMAN NAMBIAR, EDAVAN PUTHIYEDATH HOUSE, NEDIYENGA AMSOM DESOM, FORMERLY HEAD CLERK, NEDIYENGA SERVICE CO-OPERATIVE BANK, CHEMPANTHOTTY. 4. K.P.GAGADHARAN, S/O.KUNHAMMBU NAMBIAR, KOROTH PATTUVAN HOUSE, ELLARANHI, KOOTTUMUGHAM, TYPIST, NEDIYENGA SERVICE CO-OPERATIVE BANK, CHEMPANTHOTTY. 5. K.P.KRISHNANKUTTY, S/O.APPANU NAIR, KUMIZHUPUTHIYA VEETTIL, NEDIYENGA AMSOM DESOM, ATTENDER, NEDIYENGA SERVICE COOPERATIVE BANK, CHEMPANTHOTTY. 6. T.P.SIVARAMAN, S/O.ACHUTHAN, JANAKI NIVAS, CHERUPAZHASSI P.O., KOLACHERY VIA, KANNUR, FORMERLY SECRETARY-IN-CHARGE, NEDIYENGA SERVICE CO-OPERATIVE BANK, CHEMPANTHOTTY. 7. V.K.SURESH KUMAR, S/O.A.V.LAKSHMANAN, KAKKEN HOUSE, PALLIKKUNNU, KANNUR, FORMERLY SECRETARY, LITCO PRESS, KANNUR. BY ADVS.SRI.P.VIJAYA BHANU (SR.) SRI.M.REVIKRISHNAN SRI.VIPIN NARAYAN ## RESPONDENTS/DEFACTO COMPLAINANT/PETITIONER AND STATE: ---------------------------------------------------------------------------------------------- 1. P.KUNHIKANNAN, S/O.KUNHIRAMAN, PALAKEEL HOUSE, KOTTOOR, SREEKANDAPURAM VILLAGE-670631. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R1 BY ADV. SRI.P.NARAYANAN R1 BY ADV. SRI.NICHOLAS JOSEPH BY PUBLIC PROSECUTOR SMT.MAYA M.N. THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 24.01.2017, THE COURT ON 07-07-2017 PASSED THE FOLLOWING: Crl.MC.No. 4469 of 2013 ## APPENDIX ## ANNEXURES A- TRUE COPY OF THE PETITION FOR WITHDRAWAL PREFERRED BY THE 2ND RESPONDENT HEREIN THROUGH THE ADDITIONAL LEGAL ADVISOR, VIGILANCE AND ANTI-CORRUPTION BUREAU, KOZHIKODE AS CMP.849 OF 2012 IN C.C.56 OF 2008 ARISING OUT OF V.C.4/06/KNR PENDING BEFORE THE COURT OF THE ENQUIRY COMMISSIONER AND SPECIAL JUDGE, KOZHIKODE. B- TRUE COPY OF THE ORDER DATED 26.3.2013 IN CMP.849/2012 IN C.C.56 OF 2008 PASSED BY THE ENQUIRY COMMISSIONER AND SPECIAL JUDGE, KOZHIKODE. C- TRUE COPY OF THE PROCEEDINGS OF THE BOARD OF DIRECTORS OF THE BANK HELD ON 28.3.2008. D- TRUE COPY OF THE PROCEEDINGS OF THE BOARD OF DIRECTORS OF THE BANK HELD ON 28.3.2008 E- TRUE COPY OF THE ORDER ACCORDING SANCTION DATED 18.4.2008 SUBSEQUENT TO THE PROCEEDINGS HELD ON 28.3.2008 AND DECISION TAKEN THEREON, REVIEWING THE SAME , PASSED BY THE BOARD OF DIRECTORS OF THE BANK. //True Copy// P.S.To Judge ## **A.M.BABU, J.** - - - - - - - - - - - - - - - - - - - - Crl.M.C.4469 of 2013 - - - - - - - - - - - - - - - - Dated : 7[th] July, 2017 - - - - - - - - - - - - - - - - - - - - - - - - ## **ORDER** - 1.An order declining consent to the prosecution to withdraw from prosecution is sought to be set aside under Sec.482 of the Code of Criminal Procedure. - 2.Petitioners are the accused in C.C.56/2008 pending before the Court of the Enquiry Commissioner and Special Judge, Kozhikode. The petitioners have been charged under Sec.13(2) of the Prevention of Corruption Act (for short, the P.C. Act) and under Secs 120B, 201, 409, 420, 465, 466, 468, 471 and 447A of the Indian Penal Code. - 3.Petitioners 1 and 2 are respectively the former administrator and secretary of the Nediyenga Service Co-operative Bank Ltd (hereinafter referred to as the bank). Petitioners 3 to 6 work or worked in the bank as the head clerk, typist, attender and auditor respectively. The 7[th] petitioner was the secretary of **Crl.M.C.4469/13** 2 a press called the Litco press at Kannur. - 4.The 1[st] respondent herein filed a complaint before the court below against the petitioners. The complaint was forwarded to the Vigilance and Anti Corruption Bureau, Kannur directing to hold an inquiry in the matter. A vigilance case was registered. Investigation was conducted. Charge-sheet was filed against the petitioners. - 5.The prosecution case goes as follows : It all happened during 2001-2002. Petitioners 1 to 6 abused their official position and entered into a criminal conspiracy with dishonest intention to cheat the bank. Bogus vouchers were created in the name of Adv.Sri.George Poonthottam who conducted cases in the High Court for the bank. Petitioners 1 to 3, 6 and 7 conspired and such conspiracy resulted in forging the bills of Litco press. The fabricated bills and vouchers were passed by petitioners 1 to 3 on different dates for payment. A total amount of Rs.1,16,325/- was withdrawn from the bank using those fabricated documents. Of the said amount, Rs.84,500/- **Crl.M.C.4469/13** 3 was withdrawn against the bogus vouchers created in the name of Adv.Sri.George Poonthottam. The remaining amount of Rs.31,825/- was withdrawn using the forged bills of Litco press. Rs.25,000/- was entrusted with the 4[th] petitioner and Rs.15,000/- with the 5[th] petitioner for payment to Sri.George Poonthottam. He disowned the vouchers created in his name. The amount withdrawn from the bank was misappropriated by the petitioners. - 6.The additional legal adviser in charge of the case filed C.M.P.849/2012 seeking the consent of the court below to withdraw from prosecution. The court below gave notice to the 1[st] respondent. He filed a written objection against grant of consent. The learned special judge dismissed the application holding that sufficient grounds did not exist for the additional legal adviser to withdraw from prosecution. The petitioners want this court to set aside the impugned order and allow the application (C.M.P.849/2012) - 7.Heard the learned counsel for the petitioners, the learned counsel for the 1[st] respondent and the learned **Crl.M.C.4469/13** 4 public prosecutor. - 8.Annex-A is the copy of the application seeking consent of the court for withdrawal from prosecution. Annex-B is the copy of the impugned order dismissing annex-A application. Three reasons are stated in annex-A for withdrawal from prosecution. The reasons are (i) inadequacy of evidence against the petitioners, (ii) defective sanction under Sec.19 of the P.C.Act and (iii) recovery of amounts from petitioners 4 and 5. 9.Annex-A itself refers to the withdrawal of Rs.84,500/- and Rs.31,825/- from the bank using bogus vouchers/receipts and bills. Annex-A states that the investigation revealed the withdrawal of Rs.84,500/- against the fake vouchers created in the name of Adv.Sri.George Poonthottam. It is also stated that Rs.31,835/- was withdrawn through the vouchers of the Litco press showing higher amounts than the actuals. Thus, the author of annex-A application still has no case that no offence at all was committed. **Crl.M.C.4469/13** 5 10.The averments in annex-A to highlight inadequacy of evidence are stated below: Adv.Sri.George Poonthottam did not disown receipt of his fees from the bank for conducting its cases in the High Court. The original documents are essential to prove the offence of forgery, but not available. The original vouchers are necessary for comparing the signature of Sri.George Poonthottam with the signatures in the vouchers standing in his name. Out of Rs.84,500/- withdrawn, Rs.25,000/- was entrusted with the 4[th] petitioner and Rs.15,000/- with the 5[th] petitioner for payment to Sri.George Poonthottam, but there is no direct evidence as to with which petitioner the balance Rs.44,500/- was entrusted. No investigation was conducted to find out whether the bank had entrusted the printing job with the Litco press and if so, what were the materials printed and supplied to the bank. - 11.Annex-A itself suggests that Adv.Sri.George Poonthottam who did not deny the receipt of his legal fees from the bank did disown the receipts created in his name. The impugned order refers to the statement **Crl.M.C.4469/13** 6 given by Sri.George Poonthottam to the investigating officer. The court below states that Sri.George Poonthottam has denied having issued the receipts in question and also denied the receipt of the amounts shown in those receipts. Still the additional legal adviser considers the evidence inadequate to prove the forgery and misappropriation alleged by the prosecution. Quite unfortunate. 12.The investigating officer could seize only the photocopies of the receipts/vouchers allegedly created in the name of Sri.George Poonthottam. The original receipts/vouchers could not be seized. The additional legal adviser considers the original documents absolutely essential to prove forgery. But he lost sight of Sec.65 of the Indian Evidence Act. Thereunder, secondary evidence may be given of the existence, condition and contents of a document if any of the conditions in clauses (a) to (g) thereto is satisfied. All that the prosecution should do is to establish its entitlement to bring secondary evidence. Therefore the case is not lost for the prosecution simply because the original documents are 7 ## **Crl.M.C.4469/13** lost. Annex-B order refers to the statement given by CW21. He was the president of the bank. His statement was that the original vouchers/receipts created in the name of Sri.George Poonthottam were taken from the bank by the 4[th] petitioner. In view of the said statement given by CW21, the author of annex-A application is not at all justified in stating therein that evidence is inadequate since the original receipts are not available. 13.According to the additional legal adviser, the original receipts are necessary for comparing the signatures in those documents with the signature of Sri.George Poonthottam. It is not possible to agree with the said reasoning too. The additional legal adviser has not stated as to who needs the original receipts to compare the signatures therein with the admitted signature of Sri.George Poonthottam. I need only to refer to a decision of the apex court if what was in the mind of the additional legal adviser was the comparison of the signatures by an expert. The decision is Laxmipat Choraria v. State of Maharashtra (AIR 1963 SC 938). The apex court holds **Crl.M.C.4469/13** 8 at paragraph 17 of the judgment that even if the originals be not forthcoming, opinion as to the handwriting can be formed from the photographs as the experts base their opinion on enlarged photographs. True, that stage is over in the present case as the investigation has been completed. As already stated, Sri.George Poonthottam disowned the vouchers which were created in his name. What the prosecution should do is to examine him in court. Non-availability of the original receipts does not justify the decision to withdraw from prosecution. - 14.Annex-A states that there is no evidence as to with whom Rs.44,500/- out of Rs.84,500/- was entrusted. It may be true. But that is not sufficient to highlight inadequacy of evidence. It is so particularly when it is stated in annex-A itself that Rs.25,000/- was entrusted with the 4[th] petitioner and Rs.15,000/- with the 5[th] petitioner. - 15.According to the additional legal adviser, no investigation was conducted to find out whether the bank had entrusted the printing job with the Litco **Crl.M.C.4469/13** 9 press and if so, what were the materials printed and supplied to the bank. It does not appear that the prosecution case would collapse for that reason. The learned special judge who perused the case diary stated as follows at paragraph 19 of the impugned order : “As far as allegation regarding misappropriation of funds by forging the vouchers of LITCO press is concerned, the prosecution has produced the original bills of LITCO press which is alleged to be forged and they are bills having numbers 15, 206, 207, 277, 322, 323 and 226....................................... .......................................... .......... The prosecution has seized the Bill Books containing carbon copies of these bills and produced before this Court. They will reveal that, in the carbon copy of the bills having numbers 15, 206, 207, 277 and 226 the name of Nediyenga Service Co-operative Bank is not seen. Instead of name of the bank, name of some other institutions are seen. In the carbon copy of Bill No.322 even though the name of Nediyenga Service Co-operative Bank is seen, the amount shown is different. In the original bill amount is shown as Rs.18,125/-. In the carbon copy of the bill, the amount shown is Rs.14,000/-. In the case of bills having numbers 15,206, 207, 277 and 226 the date and amount shown in the original bills and in the carbon copy are different. In Bill No.323 there is difference between original bill and carbon copy. In some of these bills there are endorsement regarding passing of these bills for payment by th Part-time Administrator and in all these bills there is endorsement of the Secretary to pay the cash and there is seal affixed that cash is received”. That means there are sufficient materials for the **Crl.M.C.4469/13** 10 prosecution to go on with the prosecution. The additional legal adviser is not at all justified in applying for the consent of the court to withdraw from prosecution on the ground of inadequacy of evidence. - 16.The sanction under Sec.19 of the P.C.Act for prosecution was accorded by the board of directors of the bank. Annex-A states that the sanction is defective inasmuch as the board of directors had once declined to give sanction to prosecute petitioners 3 to 5. According to the additional legal adviser, the competent authority which declined to accord sanction cannot re-consider and review the earlier decision. The court below stated that no document was produced before it to show that the competent authority had once refused to issue sanction to prosecute petitioners 3 to 5. - 17.The petitioners have produced before this court annex-C and annex-D which are the photocopies of the proceedings of the board of directors of the bank declining sanction. Therefore it can be taken that **Crl.M.C.4469/13** 11 the sanction was once refused by the board of directors. The same authority subsequently accorded the sanction. Accordingly, annex-E order according sanction was issued by the President of the bank. The additional legal adviser states in annex-A that it is settled law that once the competent authority has declined prosecution sanction, it cannot subsequently re-consider and review the earlier order. In order to state so the additional legal adviser mentioned in his application the decision of the apex court in State of Punjab v. Muhammed Iqbal Bhatti (2010 Crl.L.J 1436). The dictum of the decision is not as understood by the additional legal adviser. The Supreme court holds at paragraph 7 of the judgment as follows : “Although the State in the matter of grant or refusal to grant sanction exercises statutory jurisdiction, the same, however, would not mean that power once exercised cannot be exercised once again. For exercising its jurisdiction at a subsequent stage, express power of review in the State may not be necessary as even such a power is administrative in character.” It is only said in the said decision that the decision to accord sanction after reviewing the earlier decision refusing the sanction was bad as no **Crl.M.C.4469/13** 12 fresh materials were placed before the competent authority to take a different view and accord the sanction. The Supreme Court did not say that once sanction was refused, it could not at all be reconsidered. 18.The learned counsel for the petitioners relied on the decision of the Supreme Court in State of Himachal Pradesh v. Nishant Sareen (AIR 2011 SC 404). The dictum of this decision is also not that the government or the competent authority cannot review its earlier decision under any circumstance. The dictum is that it is not permissible for the sanctioning authority to review or re-consider the matter on the same materials again. Same is the dictum in the decision of this court in Sathianathan v. CBI (2015 (1) KHC 571), cited on the side of the petitioners. There is no whisper in annex-A application that the board of directors of the bank re-considered the earlier decision on the very same materials placed before it. Even the memorandum of the present Crl.M.C does not whisper that the reconsideration and review were on the same materials. **Crl.M.C.4469/13** 13 It should not go unnoticed that nobody challenged annex-E sanction order so far. The petitioners cannot challenge it collaterally in the present proceedings. 19.The learned counsel for the 1[st] respondent has submitted that annex-E sanction order is a speaking order considering all aspects in detail. The learned counsel submits that annex-C and annex-D proceedings considered nothing except a legal opinion of the legal adviser of the bank. It is also submitted that the directors of the bank did not apply their minds to minute annex-C and annex-D minutes. I refrain from making any comment on the argument of the learned counsel for the 1[st] respondent in the above lines. It is so because the alleged defective sanction is a defence the petitioners can take at the appropriate time in the proceedings before the court below. - 20.Annex-A states that responding to the notices issued to petitioners 4 and 5 in view of the audit objection, they remitted back the amounts received by them from the bank for payments to Adv.Sri.George Poonthottam. If that is taken as a ground for **Crl.M.C.4469/13** **==> picture [13 x 9] intentionally omitted <==** withdrawal from prosecution, every forger is safe. If such is the attitude, every person who misappropriates public money is safe, provided he is prepared to refund the money when caught. Remitting the money back should mean what ? Let the court below take a decision on that question on the merits of the case. The fact that petitioners 4 and 5 refunded the money allegedly misappropriated by them is certainly not a ground to justify the decision of the additional legal adviser to withdraw from prosecution. - 21.The learned counsel for the petitioners relied on the decisions of this court in Madan Gopal v. State of Kerala (1989 (1) KLT 92) and Abdul Wahab v. State of Kerala (2013 (4) KLT SN 29 (Case No.29) - full text of the decision is supplied by the counsel). Both the decisions state as to what is the duty of the court when it is called upon to give consent for the withdrawal from prosecution. I do not consider that the court below considered anything which should not have been considered in considering an application to grant the consent. When inadequacy of **Crl.M.C.4469/13** 15 evidence is a ground stated for withdrawal from prosecution, the court is duty bound to read the evidence produced before it by the prosecution. All that the court below did was that. The court is justified in doing so. Both the decisions relied on by the petitioners hold that consent of the court is not a matter of course. It is held in Madan Gopal (supra) that all that the court has to see is whether the public prosecutor acted in good faith and the exercise of his discretion was proper. The decision in Abdul Wahab (supra) holds that once the court concludes that the application is properly made and that there is independent consideration of the matter by the public prosecutor and he has acted in good faith in exercising the discretion vested in him, the court should allow the application. For reasons already stated, it is impossible in the present case to hold that the additional legal adviser acted in good faith in exercising his discretion or that he properly applied his mind. He highlighted inadequacy of evidence in a case where the investigating officer collected sufficient evidence to prosecute the case. Even refund of the amounts allegedly misappropriated 16 ## **Crl.M.C.4469/13** was considered by the additional legal adviser a ground for withdrawal from prosecution. The sanction under Sec.19 of the P.C.Act was contended to be defective without even understanding the dictum in Muhammed Iqbal Bhatti's case (2010 Crl.L.J 1436). The court below did no mistake when the consent sought for was refused. - 22.There is little scope for interference with the impugned order. The Crl.M.C is devoid of merit. It deserves only a dismissal. ## 23.Dismissed. **Sd/A.M.BABU Judge** Mrcs/4.7 //True Copy// P.S.To Judge