Prayer:Criminal Appeals filed under Section 374(2) Cr.P.C. against the judgment of conviction and sentence, dated 10.02.2006 made in C.C.No.5 of 1999 on the file of the learned Additional Special Judge for C.B.I. Cases, Chennai.
COMMONJUDGMENT
1. The Criminal Appeals arise out of the judgment of conviction and sentence, dated 10.02.2006, made in C.C.No.5 of 1999, on the file of the learned Additional Special Judge for C.B.I. cases, Chennai, whereby the accused 1, 3 and 4 were convicted for an offence under Section 120B IPC and sentenced them to undergo each one year rigorous imprisonment and imposed a fine of Rs.1,000/- each in default in payment to undergo each three months simple imprisonment. A1 was further convicted for an offence under Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 and sentenced him to undergo two years rigorous imprisonment with a fine of Rs.1,000/- ( 1 count) in default in payment to undergo three months simple imprisonment. A3 was further convicted for an offence under Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act, 1988 and sentenced him to undergo two years rigorous imprisonment with a fine of Rs.1,000/- ( 8 counts) in default in payment to undergo three months simple imprisonment. A4 was further convicted for an offence under Sections 419(9 counts) and 420(9 counts) IPC and sentenced him to undergo two years rigorous imprisonment with a fine of Rs.1,000/- ( 9 counts) in default in payment to undergo three months simple imprisonment. The sentences imposed against A1, A3 and A4 were ordered to be run concurrently.
2.The case of the prosecution is as follows:
(i) During the period between 1991 and 1993, A1/Dilip Kumar was working as Manager, A2/V.Krishnan was working as a Clerk, A3/Palanivadivelu was working as an Officer, in the Indian Bank, Mappedu Branch and A4/Kumaresan was an individual, entered into a criminal conspiracy at Mappedu Branch and other places to do an illegal act mainly to cheat the Indian Bank and committed criminal misconduct and in pursuance of the criminal conspiracy, A4 fraudulently and dishonestly submitted loan applications in the names of fictitious persons such as Mohan, Sampath, Raju, Ravi, Gopal, Selvaraj, Ganesan, Gnanam and Babu and impersonating as above fictitious persons in the loan documents and presented the same as genuine to the Bank. In pursuance of the conspiracy, without proper verification, A1 fraudulently and dishonestly sanctioned the loan of Rs.12,500/- in the name of Ganesan and in pursuance of the conspiracy, A3/Palanivadivelu and A2/Krishnan prepared the loan documents in the name of the fictitious persons, A3 knowing fully well that the loanees are non-existing, processed the documents as genuine to the Bank and sanctioned loan to other persons except Ganesan and thereby, cheated the Bank misusing or abusing their official position caused the wrongful loss to the tune of Rs.1,12,500/- and corresponding wrongful gain to themselves. So the investigating agency filed a charge sheet against the accused for the offences under Sections 120B, 420, 467, 468, 471 IPC and Sections 13(2) r/w 13(1)(d) of P.C.Act. (ii) On perusal of documents under Exs.P7, P15, P32, P42, P57, P76, P102, it shows that A3 alone sanctioned the loan for the persons except Ganesan.
(iii) P.W.3 and P.W.4, who are working as Manager, deposed about the procedures to be followed in the Bank, while sanctioning loans for agriculture and crop, to retail traders.
(iv) P.W.5-Thalayari, who was also an Assistant to P.W.10-V.A.O., deposed that Exs.P3 & P5-chitta and Exs.P4 & P6-Adangal, which were said to be issued by an V.A.O., did not contain P.W.10's signature. (v) P.W.6-Karuppaiah, who was working as Branch Manager in the Indian Bank, Mappedu Branch, deposed about the documents under Ex.P3 to Ex.P133. Ex.P91 is the loan application given by Ganesan and the filled up columns are in the handwriting of A3 and Ex.P90 is the form for opening the account. Exs.P93 & P94 are chitta & adangal and Exs.P95 & P96 are Agreement for hypothecation-Agricultural and Agreement of Guarantee. The demand promissory note dated 20.02.1992, was marked as Ex.P97. Ex.P98 was prepared for debiting the loan amount regarding Ganesan and Ex.P99 was prepared for crediting the loan amount regarding Ganesan. In Exs.P98 and P99, the ledger postings are in the handwriting of A1. The loan ledger, which contains the details of the documents, loan, account number, rate of interest etc. in respect of Ganesan, is in the handwriting of A1 and it was marked as Ex.P100. The withdrawal slip was marked as Ex.P101 and the sanction amount has been received by A4. (vi) P.W.8-Annamalai, who is a customer, deposed that he is having account in the Indian Bank and his S.B. Account Number is 1675 and he introduced the loanees, namely, Babu, Selvaraj and Mohan, for opening account in the Bank at the request of A4, without seeing the loanees. (vii) P.W.9, VAO of Koovam Village, deposed that Exs.P28, P48, P78, P79 and P94 were not issued by him and they did not contain his signature. He further stated that he furnished his specimen signatures under Ex.P134 (series). (viii) P.W.10-Sivamani, VAO, deposed that Exs.P4, P70, P108 and P124, did not contain his signature. He further deposed that he furnished his specimen signatures under Ex.P135 (series).
(ix) P.W.11-Devendra rao, who was working as Cashier, deposed that on the basis of the loan sanctioned, he disbursed the amount to one Kumaresan, who received the loan amount, on behalf of the loanees. He further deposed that all the loanees were paid Rs.50/- as initial deposit for opening S.B. account in their names. (x) P.W.12-Vivekanandan, who is a customer, deposed that he is having S.B. Account at Indian Bank, Mappedu Branch and his S.B. Account number is 1128 and he introduced Gopal and Gnanam for opening S.B. account in the Bank at request of A4, without seeing the loanees. (xi) P.W.11-Devendrarao further stated that the account has been opened in the name of loanees and loan has been sanctioned and withdrawal slip has been marked as Exs.P11, P20, P41, P56, P71, P86, P116 and P131 and through the withdrawal slips, A4 received the amount. P.W.13-Thalayari, who was working as Village Assistant, was treated as hostile witness. (xii) The following table shows the details of the loan and loanees:
Sl.No.
Name of the loanees S.B.
Act.No.
Loan Date
Amount
Withdrawal slip
Received by
1. Ravi
2059
4.10.1991
12530
Ex.P11
A4/
Kumaresan
2. Mohan
2114
6.12.1991
12500
Ex.P20
A4/
Kumaresan
3. Sampath
2108
6.12.1991
12500
Ex.P41
A4/
Kumaresan
4. Raju
2107
6.12.1991
12500
Ex.P56
A4/
Kumaresan
5. Gopal
2055
4.10.1991
12530
Ex.P71
A4/
Kumaresan
6. Selvaraj
2113
6.12.1991
12300
Ex.P86
Selvaraj
7. Gnanam
2054
4.10.1991
12530
Ex.P116
A4/
Kumaresan
8. Babu
2060
4.10.1991
12530
Ex.P131
A4/
Kumaresan
9. Ganesan
2119
25.2.1992
12500
Ex.P101
A4/
Kumaresan, sanctioned by A1.
(xiii) P.W.6-Karuppaiah, who was working as a Manager, stated in his evidence that the loanees had not repaid that amount and he further stated that without considering the real fact, loan was sanctioned in the names of fictitious persons. Hence, P.W.2-Gopalakrishnan, who was working as Chief Manager of Indian Bank at Central Office, Vigilance Department, Chennai, gave a complaint Ex.P2 on 23.02.1995, against A1/Dilip Kumar, A2/Krishnan and A3/Palanivadivelu. (xiv) P.W.15-Inspector of Police, C.B.I., received the complaint on 28.02.1995, at 11.00 a.m. and registered a case in R.C.11(A)/95 under Sections 120B, 420, 467, 468, 471 IPC and Sections 13(2) r/w 13(1)(d) of P.C. Act, 1988, against the accused 1, 2 and 3 and then made a search in the houses of the accused and the search lists were marked as Exs.P178 to P180. Then, he examined the witnesses and obtained the specimen signatures. (xv) P.W.14-A.K.Singh, who was working as an Assistant Government Examiner of disputed documents at Hyderabad, received specimen signatures of Somasundarm, Sivaramudaliar, Kumaresan, Mani and Narayana Singh and the same were marked as Exs.P136 to P140. Specimen signatures of Vikraman, Arasan, Palanivadivelu, Dilip Kumar and Selvaraj were marked as Exs.P141 to P145. The admitted signatures of Somasundaram, Sivananda Mudhali and C.Mani were marked as Exs.P146 to P149 and the disputed signatures were marked as Exs.P150 to P172 and then he examined the documents and gave opinion under Ex.P173 and the covering letters were marked as Exs.P174 and P175 and the reasoning sheets were marked as Ex.P176. (xvi) P.W.15 after completing his investigation, obtained Ex.P1 sanction order from P.W.1 for prosecuting the accused and laid the charge sheets before the Court against A1 to A4.
3.The learned Additional Special Judge for C.B.I. cases, after following the procedure, framed necessary charges. Since the accused pleaded not guilty, the learned Special Judge examined the witnesses P.W.1 to P.W.15 and marked the documents Exs.P1 to P182 and placed the incriminating evidence before the accused and the accused denied the same. The Special Court after considering the oral and documentary evidence, acquitted A2 and convicted and sentenced the accused 1, 3 and 4 as stated above, against which, A1 preferred an appeal in Crl.A.No.216 of 2006, A3 preferred an appeal in Crl.A.No.198 of 2006 and A4 preferred an appeal in Crl.A.No.205 of 2006.
4.Mr.R.Vijayaraghavan, the learned counsel is appearing for the appellant/A1 in Crl.A.No.216 of 2006. Mr.A.V.Somasundaram, the learned counsel for M/S.Lakshmipriya Associates, is appearing for the appellant/A3 in Crl.A.No.198 of 2006. Mr.K.Shankar, the learned counsel is appearing for the appellant/A4 in Crl.A.No.205 of 2006.
5.The first and foremost argument advanced by the learned counsel for the appellants/A1 and A3 is that P.W.1 is not a competent person to accord sanction. Admittedly, the Mappedu Branch comes under the jurisdiction of Vellore Zone, but whereas the P.W.1, who is a Zonal Manager of Chennai Zone, is not a competent person. The second limb of argument advanced by them is P.W.1 has not applied his mind, while according sanction.
6.Learned counsel appearing for the appellant/A3 gone to the extent of saying that in Ex.P1-sanction order, P.W.1 has not mentioned the year and he has simply mentioned only the date and month, on which, he has accorded sanction. It shows that his non- application of mind, while according sanction. Further, the learned counsel for A3 culled out some portions of Ex.P1-sanction order and the evidence of P.W.1. To substantiate his arguments, he relied upon the following decisions:
(i).AIR 2011 SC 3114 (Rafiq Ahmed @ Rafi v. State of Uttar Pradesh)
(ii) (2009) 6 SCC 77 (S.V.L.Murthy v. State rep. by CBI, Hyderabad)
(iii) AIR 2009 SC 1822 (Vakil Prasad Singh v. State of Bihar)
(iv) AIR 2008 SC 3077 (Pankaj Kumar v. State of Maharashtra and others)
(v) AIR 2007 SC 489 (V.Venkata Subbarao v. State rep. by Inspector of Police, A.P.)
(vi) 2005 (6) Supreme 547 (State of Goa v. Babu Thomas)
(vii) (2005) 8 SCC 370 (State of Karnataka through CBI v. C.Nagarajaswamy)
(viii) 2002 (Cri.L.J. 1594 (Ramraj Prasad Karsoliya v. State of M.P.)
(ix) AIR 2001 SC 2989 (Mahendra lal Das v. State of Bihar and others)
(x) (2001) 1 Crimes (HC) 315 (J.S.Sathyanarayana (Deceased) by LRS. v. State by Inspector of Police, Karnataka Lokayukta, Madikeri)
(xi) (1993) 3 Crimes (HC) 926 (Charles Waker Devadas v. State)
(xii) (1993) 2 Crimes HC 250 (Bhurey Singh v. State of UP)
(xiii) (1984) 2 SCC 183 (R.S.Nayak v. A.R.Antulay)
(xiv) (1981) 3 SCC 610 (State of Maharashtra v. Champalal Punjaji Shah)
(xv) 1961 The Madras L.J. Reports (Criminal) State of Kerala v. Madhavan)
(xvi) (2008) 4 SCC 582 (Madan Mohan Abbot v. State of Punjab)
(xvii) AIR 2009 SC 2717 (S.V.L.Murthy v. State Rep. by CBI, Hyderabad)
7. On perusal of Ex.P1-sanction order, it is true, the order did not contain its year and it was mentioned only the date and month (i.e.) 4.12. When P.W.1 was in witness box, he was cross-examined as follows: It is correct to say that I have not mentioned the year in my sanction order. It is true that I have mentioned the day and month only in the last page of my sanction order. It is correct to say that by looking the sanction order filled in the Court I could not say the year in which the sanction was accorded. It is correct to say that from the sanction order I am not in a position to say now from which authority/I received the requisition to accord sanction to prosecute A3. .. .. .. .. All the enclosures were also received from the Vigilance Department, Head Office at Chennai. I do not remember the date when it was received by the Central Vigilance office, Head office at Chennai. Exact date I do not remember as to when all the papers were placed before me to accord sanction. I received those papers in the year 1998 to accord sanction, the sanction order may contain some mistakes or errors. ... .. .. .. I have mentioned that Palanivadivelu-A3 has sanctioned 9 loans including the loan to one R.Ganesan. I will not be in a position to say categorically as to who had sanctioned the loan to Ganesan by seeing the sanction order issued by me. .. .. .. .. In consultation with my legal department and my Vigilance Department, I prepared the sanction order. .. .. .. Mere non payment of loan amount by the loanee to the bank, will not alone make the Manager or officer liable. Certain small loans are covered by deposit insurance corporation in the year 1992. .. .. .. .. It is not correct to say that I am not competent to accord sanction to prosecute A3. It is also not correct to say that I have not applied my mind for according sanction to prosecute the accused and that I simply signed the sanction order sent by the CBI. .. .. .. .. During the incident/relevant period there was Zonal Manager name Mr.Shanmugasundaram in charge of Chennai Zone. I am aware that Mr.Shanmugasundaram only issued a show cause notice dt.23.6.94 to A1. Mr.Shanmugasundaram was also competent authority to issue sanction order for prosecution of A1 at the time. .. ..
8. Now it is appropriate to consider the Section 19(2) of Prevention of Corruption Act, which is extracted hereunder:
19(2) Where for any reason whatsoever any doubt arises as to whether the previous sanction as required under sub-section (1) should be given by the Central Government or the State Government or any other authority, such sanction shall be given by that Government or authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed.
As per the above Section, the sanction shall be given by authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed. The offence was committed in the year 1991-1992, but the Vellore zone has been formed only in the year 1995. In such circumstances, I am of the view, P.W.1-Zonal Manager of Chennai Zone, is a competent person to accord sanction, since Mappedu branch comes under Chennai Zone during the period of commission of offence. So the argument advanced by the learned counsel for the appellant that the P.W.1 is not a competent person to accord sanction, does not merit acceptance.
9.At this juncture, it is appropriate to consider the decisions relied upon by both sides.
(i) It was held by the Apex Court that the legislature thought of providing a reasonable protection to public servants in discharging of their official duties, they incorporated section 6 of the Act to prevent the harassment and vexatious prosecution of a public servant. In 1993 Cri.L.J. 558 (M.Srinivasalu Reddy v. Inspector of Police, Anti Corruption Bureau, Vellore Range, Nellore) in para-33, it is held as follows: 33. A bare reading of Section 6(1)(b) would indicate that it aims at preventing harassment and vexatious prosecution of a public servant. It assures that an honest public servant would not be in a position to oblige every one and may, therefore, incur displeasure of many of them. This displeasure may even result in his vexatious and malicious prosecution for offence relating to discharge of his official duties. The Legislature, therefore thought of providing a reasonable protection to public servants in the discharge of their official functions so that they continue performing their duties and obligations undeterred by vexatious and unnecessary prosecution. .. (ii) It is a well settled dictum of the Apex Court that before passing an order of sanction, the entire records containing the materials collected against the accused should be placed before the sanctioning authority. In AIR 2008 SC 108 (State of Karnataka v. Ameer Jan), in para-8, it reads as follows: 8. .. .. We have noticed hereinbefore that the sanctioning authority had purported to pass the order of sanction solely on the basis of the report made by the Inspector General of Police, Karnataka Lokayuktha. Even the said report has not been brought on record. Thus, whether in the said report, either in the body thereof or by annexing therewith the relevant documents, IG Police Karnataka Lokayuktha had placed on record the materials collected on investigation of the matter which would prima facie establish existence of evidence in regard to the commission of the offence by the public servant concerned is not evident. Ordinarily, before passing an order of sanction, the entire records containing the materials collected against the accused should be placed before the sanctioning authority. In the event, the order of sanction does not indicate application of mind as the materials placed before the said authority before the order of sanction was passed, the same may be produced before the court to show that such materials had in fact been produced. Sanction to prosecute given solely on basis of report made by Inspector General of Police, Karnataka, Lokayuktha. Even the said report has not been brought on record and no other documents were made available before the sanctioning authority, the order of sanction granted is illegal. (iii) It was held by the Apex Court in V.Venkata Subbarao case, since the vital documents showing involvement of the accused for commission of offence has not been produced before the sanctioning authority, sanction itself is vitiated. In AIR 2007 SC 489 (V.Venkata Subbarao v. State rep. by Inspector of Police, A.P.) in para-23, it is held as follows: 23.It is also accepted that before the Sanctioning Authority, the vital documents showing involvement of the M.R.O. had not been produced. The Sanctioning Authority, therefore, did not have any occasion to apply their mind to the entire materials on record and in that view of the matter, the sanction is, therefore, vitiated in law. Conduct of the officers of the respondent who had taken recourse to suppressio veri deserves serious condemnation.
(iv) Sanction for prosecution granted by Company Secretary and order did not refer to any order/resolution of Board of Company pursuant to which Company Secretary was authorised by Board of Directors to convey the sanction. Subsequently, another sanction order came to be issued by the Chairman and Managing Director stating that order was passed in exercise of powers vested and on behalf of Board of Directors and that sanction was being granted retrospectively. Sanction order did not refer to any resolution of Board of Directors pursuant to which Chairman issued sanction order, the sanction order being invalid, cognizance taken was bad in law. In 2005 (6) Supreme 547 (State of Goa v. Babu Thomas), in para-14, it reads as follows: 14.Having regard to the gravity of the allegations levelled against the respondent, we permit the competent authority to issue a fresh sanction order by an authority competent under the Rules and proceed afresh against the respondent from the stage of taking cognizance of the offence and in accordance with law.
(v) It was held by the Apex Court that who is the competent authority to accord sanction and that the competent authority to accord sanction would be the one competent to remove him from the office which he alleged to have misused or abused with corrupt motive. In (1984) 2 SCC 183 (R.S.Nayak v. A.R.Antulay) in para-15, 17 and 23, it reads as follows:
15.The appellant, the original complainant, contends that the learned special Judge was in error in holding that M.L.A. is a public servant within the meaning of the expression under Sec.21(12)(a). The second submission was that if the first question is answered in the affirmative, it would be necessary to examine whether a sanction as contemplated by Sec. 6 is necessary. If the answer to the second question is in the affirmative it would be necessary to identify the sanctioning authority. The broad sweep of the argument was that the complainant in his complaint has alleged that the accused abused his office of Chief Minister and not his office, if any, as M.L.A. and therefore, even if on the date of taking cognizance of the offence the accused was M.L.A., nonetheless no sanction to prosecute him is necessary as envisaged by Sec. 6 of the 1947 Act. It was urged that as the allegation against the accused in the complaint is that he abused or misused his office as Chief Minister and as by the time the complaint was filed and cognizance was taken, he had ceased to hold the office of the Chief Minister no sanction under Sec. 6 was necessary to prosecute him for the offences alleged to have been committed by him when the accused was admittedly a public servant in his capacity as Chief Minister.
17.On these rival contentions some vital and some not so vital points arise for consideration, some easy of answer and some none-tooeasy. For their scientific and logical treatment they may be formulated: (a) What is the relevant date with reference to which a valid sanction is a pre-requisite for the prosecution of a public servant for offences enumerated in Sec. 6 of the 1947 Act?
(b) If the accused holds plurally of offices occupying each of which makes him a public servant, is sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him necessary and if anyone of the competent authorities fails or declines to grant sanction, is the Court precluded or prohibited from taking cognizance of the offence with which the public servant is charged (c) Is it implicit in Sec. 6 of the 1947 Act that sanction of that competent authority alone is necessary, which is entitled to remove the public servant from the office which is alleged to have been abused for misused for corrupt motives (d) Is M.L.A. a public servant within the meaning of the expression in Sec. 21(12)(a) IPC ?
(e) Is M.L.A. a public servant within the meaning of the expression in Sec.21(3) and Sec. 21(7) IPC ?
(f) Is sanction as contemplated by Sec. 6 of the 1947 Act necessary for prosecution of M.L.A. ?
(g) If the answer to (f) is in the affirmative, which is the Sanctioning Authority competent to remove M.L.A. from the office of Member of the Legislative Assembly?
23. .. .. A grant of sanction is not an idle formality but a solemn act which removes protection against frivolous prosecutions. Therefore, the authority entitled to grant sanction must apply its mind to the facts of the case, evidence collected and other incidental facts before according sanction. The removal authority alone would be able when facts and evidence are placed before him to judge whether a serious offence is committed or the prosecution is frivolous or speculative. It is the vertical hierarchy between the authority competent to remove the public servant from that office and the nature of the office held by the public servant against whom sanction is sought which would indicate a hierarchy and which would therefore, permit inference of knowledge about the functions and duties of the office and its misuse or abuse by the public servant. Sanctioning authority where accused holds a number of public offices, competent authority to accord sanction would be the one competent to remove him from the office which he alleged to have misused or abused with corrupt motive removal authority to apply its mind on the question of sanction considering the allegation regarding corrupt use of official power. (vi) It was held that the competence of the authority to order removal or dismissal will have to be determined with reference to the requirements of Article 311 of the Constitution. In 1961 The Madras L.J. Reports page 535 (Criminal) State of Kerala v. Madhavan) in which, it is held as follows: No order showing delegation of powers has been produced in the case. Even if there is any such delegation, it will not satisfy the requirements of Article 311 of the Constitution. That by a change in the rules altering by downgarding it, the appointing authority would not affect the guarantee afforded by a statutory provision appears to be well settled. Therefore, the competence of the authority to order removal or dismissal will have to be determined with reference to the requirements of Article 311 (1) of the Constitution and one of the requirements is that the authority that orders dismissal or removal should not be one subordinate in rank to that by which the civil servant in question was appointed and the principle would appear to that it is the factum of the appointment of the civil servant who claims the guarantee that determines the scope of the guarantee conferred by Article 311. Here the appointment was by the erstwhile Cochin Government and it is only the Kerala Government the successor to the Cochin Government who can give sanction. (vii) In (2005) 8 SCC 370 (State of Karnataka through CBI v. C.Nagarajaswamy), it was held by the Apex Court that the sanction of the competent authority under Section 6 of the Act was not produced and that the trial is therefore invalid and vitiated. In para-14 and 15, it is held as follows: 14.Ordinarily, the question as to whether a proper sanction has been accorded for prosecution of the accused persons or not is a matter which should be dealt with at the stage of taking cognizance. But in a case of this nature where a question is raised as to whether the authority granting the sanction was competent therefor or not, at the stage of final arguments after trial, the same may have to be considered having regard to the terms and conditions of service of the accused for the purpose of determination as to who could remove him from service.
15.Grant of proper sanction by a competent authority is a sine qua non for taking cognizance of the offence. It is desirable that the question as regards sanction may be determined at an early stage.
In a case where a proper order of sanction was not passed, the court will have no jurisdiction to take cognizance thereof and as such a judgment passed therein shall be illegal and of no effect and in that view of the matter, subsequent trial with proper sanction is not barred.
(viii) It is a well settled dictum of the Apex Court that if a person who granted sanction is not a competent person, the sanction itself is illegal. So the Court is not a competent to take cognizable offence without proper sanction. In 2002 (Cri.L.J. 1594 (Ramraj Prasad Karsoliya v. State of M.P.) in para-3, 9 and 10, it is held as follows: 3. The charge-sheet discloses that sanction for prosecution of the applicant as per Section 19 of the Act was granted by the Board on 24-10-97. The sanction order shows that on 22-3-97 when the alleged offence was committed, the applicant was working as Managing Director of the Nigam. It also appears from the sanction that initially he was an employee of the aforesaid Nigam as General Manager (Engineering), and he was posted as a Managing Director in absence of the Managing Director to be appointed under Section 12 of M.P. Rajya Beej Evam Farm Vjkas Nigam Adhiniyam, 1980 (for short the Adhiniyam). It appears that there was a discussion in the meeting regarding power to the Board to grant sanction and the Board was advised that it had power to do so. Accordingly, the sanction was granted. It appears that the basis for the legal advise rendered to the Board was perhaps because the applicant was the regular employee of the Nigam and he was governed by the rules framed under the Adhiniyam.
9. .. .. The applicant was appointed to fill up the vacancy created by the absence of the Managing Director to act as one in his place during his absence. However, the Adhiniyam did not delegate the power of appointment of Managing Director under Section 12 to the Nigam. The Slate remains statutory appointing authority under Section 12 of the Adhiniyam. However brief the period of appointment of Managing Director appointed under Section 12 may be, because the tenure of the Managing Director under Section 12 of the Adhiniyam is governed by the period of absence on part of the Managing Director appointed under Section 11 of the Adhiniyam, it cannot be said that the status of the Managing Director is not conferred by the Adhiniyam upon such person. At best it can be said that he is officiating in the capacity of the Managing Director during absence of the person who used to perform his duties under Section 11 of the Adhiniyam. The applicant cannot be deemed to be a person holding current charge because in that case, the legislature would not be required to frame Section 12 of the Adhiniyam nor do the words of Section 12 indicate that the Managing Director appointed under the leave vacancy shall be deemed to hold the current charge. Therefore, for all practical purposes, the status of a Managing Director appointed by the State Government under Section 12 of the Adhiniyam is akin to that of the Managing Director appointed under Section 11 of the Adhiniyam. His status being at par and the appointing authority being the State Government, it is obvious that the State Government alone is competent to remove him from the office of the Managing Director under Section 12 of the Adhiniyam. The conclusion of this Court is supported by Section 16 of M.P. General Clauses Act, 1957 which is applicable to an Act or Adhiniyam framed by the State legislature. It says that unless a different intention appears, the authority for the time being having power to make the appointment shall also have power to suspend or dismiss any person appointed by it. Nothing has been pointed out to me to show that despite the power of appointment vested in the State Government under Section 12 of the Adhiniyam, the Managing Director, so appointed, could be removed from his office by the Nigam or the Board on behalf of the Nigam. It is another matter that he could be dismissed or removed from his office of General Manager (Engineering, while holding that office as such, by the Nigam or the Board on its behalf. It appears that there was some misgiving in the minds of those persons who rendered the advice to the Board that the power of removal still vested in it despite the fact that the applicant was working as Managing Director appointed by State under Section 12 of the Adhiniyam. The advice rendered was without any legal foundation.
10. In view of the aforesaid discussion, this Court is of the view that sanction granted for prosecution of the applicant under Section 19(1)(c) of the Act was not in accordance with law. This Court sets aside the proceedings pending before the Special Judge as those are held to be without jurisdiction because the Court is not competent to take cognizance of the offence without proper sanction. The revision is allowed. It was held only the State Government alone is competent to remove the Managing Director from the office of the Managing Director under Section 12 of the Adhiniyam, since the Managing Director is not a competent person to accord sanction to prosecute the petitioner, who was temporarily appointed as a Managing Director. It was held that sanction accorded by not competent person vitiate entire proceedings and the Court is not competent to take cognizance of the offence without proper sanction. (ix) The delay in granting sanction itself vitiate the entire proceedings. In AIR 2001 SC 2989 (Mahendra lal Das v. State of Bihar and others) in para-7 and 9, it reads as follows:
7. In cases of corruption the amount involved is not material but speedy justice is the mandate of the Constitution being in the interests of the accused as well as that of the society. Cases relating to corruption are to be dealt with swiftly, promptly and without delay. As and when delay is found to have been caused during the investigation, inquiry or trial, the concerned appropriate authorities are under an obligation to find out and deal with the persons responsible for such delay. The delay can be attributed either to the connivance of the authorities with the accused or used as a lever to pressurise and harass the accused as is alleged to have been done to the appellant in this case. The appellant has submitted that due to registration of the case and pendency of the investigation he lost his chance of promotion to the post of Chief Engineer. It is common knowledge that promotions are withheld when proceedings with respect to allegations of corruption are pending against the incumbent. The appellant has further alleged that he has been deprived the love, affection and the society of his children who were residing in foreign country as on account of the pendency of the investigation he could not afford to leave the country.
9. Keeping in view the peculiar facts and circumstances of the case, we are inclined to quash the proceedings against the appellant as permitting further prosecution would be the travesty of justice and a mere ritual or formality so far as the prosecution agency is concerned, and unnecessary burden as regards the Courts.
The delay in according sanction and failure of prosecution to explain the delay, entire proceedings is liable to be quashed.
10. It was held in the following decisions that the sanction order must indicate due application of mind. It must on face of it, indicate that sanctioning authority had evaluated material placed before it Quality and form in which order is required to be passed. (i) (2001) 1 Crimes (HC) 315 (J.S.Sathyanarayana (Deceased) by LRS. v. State by Inspector of Police, Karnataka Lokayukta, Madikeri) in para-11, it is stated as follows:
11. .. .. Unfortunately, the sanction order does not even mention the fact that the records were either received or perused or that they were considered and in the absence of this, merely because cover-up action is taken in the witness-box, it would be difficult to hold that the authority in question had duly applied its mind. All that need to be said that by virtue of the basic omissions in the sanction order, of even mentioning what has been stated above, this Court will have no option except to hold that it would not be possible to accept the contention of P.W. 8 that there was due consideration and application of mind at the stage of accord of sanction. Sanction for prosecution was issued by Under Secretary to the Government sanction order must indicate due application of mind. It must on face of it, indicate that sanctioning authority had evaluated material placed before it Quality and form in which order is required to be passed. (ii) (1993) 3 Crimes (HC) 926 (Charles Waker Devadas v. State) in which, it is held as follows:
That it is not known as to what are all the documents amounting to the evidence aliunde leading to the facts involved in this instant case had been perused and, examined carefully and fully by the sanctioning authority before according sanction under Ext.P29 and it is further not known as to what are all the grounds on which the satisfaction was arrived at by the sanctioning authority before according sanction so as to make the above legal ratios applicable to the instant case. A mere reference to a report with current number of the Director of Vigilance and Anti Corruption alone does not amount to the application of mind in full by the sanctioning authority inasmuch as the grounds of satisfaction and the details of the documents that formed part of the materials placed before him has not been mentioned in the sanction order. Therefore, the above case law relied on by the Public Prosecutor will not render any assistance or help to the prosecution. On this ground, for the opinion of my reasonings given above, I am of the firm view in observing that Ext.P29 is not a valid sanction order as contemplated by section 6 of the Prevention of Corruption Act itself and that the sanctioning authority has given Ext.P29 without applying his mind with reference to any grounds of satisfaction or evidence aliunde constituting the offence against the appellant herein and accordingly, the entire proceedings are void ab initio as it is without a valid and proper sanction. Following the ratio of the Apex Court this Court in Periyasamy v. Inspector, Vigilance and Anti-Corruption, Tiruchirappalli-4, has held that the sanction order given by authority to prosecute an accused under the Prevention of Corruption Act is not an empty formality but it should be after full satisfaction on the basis of the materials and evidence made available with regard to the allegations made against the particular accused and that the non giving of any reasons pertaining to the grounds of satisfaction amounts to invalidate the sanction order itself and not in accordance with law. (iii) It was held that the grant of sanction is not an idle formality and the sanctioning authority should apply its mind before according sanction. In (1993) 2 Crimes HC 250 (Bhurey Singh v. State of UP) in para-6, it reads as follows: 6. I have gone through the original sanction order. It is a typed written paper in which neither the letter number nor the date was typed. The letter number and the date has been separately filled in with ink. The ink of the date and the signatures of we Executive Engineer is of a different colour. It is not known to who has filled the date in Ext.KA 10. It appears that a type written sanction order was placed before Sri Raj Kumar Singh who signed it on 30.07.1980 and it further appears that it was not on the dictation of Sri Raj Kumar Singh but the paper came to him from some other source, which he signed without applying his own mind. The grant of sanction is not an idle formality and the sanctioning authority should apply its mind before granting sanction in Jaswant Singh v. State of Punjab 1, and P.C.Joshi v. State of U.P.2. It has been observed that the sanctioning authority must apply its mind to the facts and circumstances of the case and only then sanction would be valid. In the premise I hold that the sanction in the present case is bad in law as it has not been accorded after application of mind. The entire prosecution is vitiated on this ground. The sanctioning authority must apply its mind to the facts and circumstances of the case and only then the sanction would be valid.
11.P.W.1 in his cross-examination, stated that in his sanction order, he mentioned that A3/Palanivadivelu has sanctioned nine loans including one R.Ganesan. But the loan in respect of R.Ganesan has been sanctioned by A1. There is a mistake apparent on record which shows that P.W.1 has not applied his mind, while according sanction. In his cross-examination, his candid admission is as follows: .. .. Exact date I do not remember as to when all the papers were placed before me to accord sanction. I received those papers in the year 1998 to accord sanction, the sanction order may contain some mistakes or errors. It is correct to say that in my sanction order at page No.18 I have mentioned the loan account of R.Ganesan, was sanctioned by Shri.Dilipkumar A1 on 20.2.92. It is correct to say that at page No.10 of my sanction order, I have mentioned that Palanivadivelu-A3 has sanctioned 9 loans including the loan to one R.Ganesan. I will not be in a position to say categorically as to who had sanctioned the loan to Ganesan by seeing the sanction order issued by me. .. ..
The above para would show that P.W.1 himself admitted the sanction order contains some mistakes or errors. Furthermore, in the above para, P.W.1 mentioned that all the nine loans were sanctioned by A3. In latter part, he stated that loan pertaining to R.Ganesan has been sanctioned by A1/Dilip Kumar. It shows that non application of mind by the sanctioning authority, while according sanction.
12.On perusal of Ex.P1-sanction order, in subsection (7) of page-18, it was mentioned as Loan account of R.Ganesan, son of Radhakrishnan, Kumaracherry, under which, it was stated that the loan of Rs.12,500/- was sanctioned by Dilip kumar on 20.02.1992 for agricultural purpose. So it shows that P.W.1 has not applied his mind, while according sanction for prosecuting the accused A1 and A3.
13.Now it is appropriate to incorporate Section 19(3) of Prevention of Corruption Act, which is extracted hereunder:
19(3)- Notwithstanding anything contained in the code of Criminal Procedure, 1973 (2 of 1974),-
(a) no finding, sentence or order passed by a special Judge shall be reversed or altered by a Court in appeal, confirmation or revision on the ground of the absence of, or any error, omission or irregularity in, the sanction required under sub-section (1), unless in the opinion of that Court, a failure of justice has in fact been occasioned thereby; (b) no Court shall stay the proceedings under this Act on the ground of any error, omission or irregularity in the sanction granted by the authority, unless it is satisfied that such error, omission or irregularity has resulted in a failure of justice; (c) no Court shall stay the proceedings under this Act on any other ground and no Court shall exercise the powers of revision in relation to any interlocutory order passed in any inquiry, trial, appeal or other proceedings.
As per the above section, no finding, sentence or order passed by the special Judge shall be reversed or altered by a Court in appeal, confirmation or revision on the ground of the absence of, or any error, omission or irregularity in, the sanction required under sub-section (1), unless in the opinion of that court, a failure of justice has in fact been occasioned.
14.At this juncture, this Court has to consider whether the irregularity has resulted in failure of justice. As per the evidence of P.W.6, loanees had not repaid and discharged the loan amount. Thereafter, they issued a notice and since it was returned, they came to know that the loanees are only fictitious persons and before that no one has suspected that the loanees are fictitious persons. Furthermore, there is no document to show that those persons are fictitious persons. Per contra, the evidence of P.W.8-Annamalai and P.W.12-Vivekanandan would prove that they introduced the persons and that has been fortified by P.W.11-Devendrarao, who has deposed before the Court that loanees after following the formalities adopted by the Bank, deposited Rs.50/- and opened S.B. Account and thereafter, they submitted their applications for agricultural loan and they executed all the relevant documents and then only the loan has been sanctioned and credited into their S.B. Accounts. One of the loanees namely, Selvaraj received the loan amount in person after giving withdrawal slip and other loanees had authorised A4 in their withdrawal slips, who received the amount and in pursuance of the same, P.W.11 disbursed the amount to A4. That factum has not been considered by the sanctioning authority and it caused failure of justice.
15.As per the dictum of the Apex Court reported in 1993 Cri.L.J. 558 (M.Srinivasalu Reddy v. Inspector of Police, Anti Corruption Bureau, Vellore Range, Nellore), providing a reasonable protection to public servants in discharging of their official positions, they incorporated section 6 of the Act to prevent the harassment and vexatious prosecution of a public servant. As per the above dictum, I am of the opinion, A1/Manager, in the absence of Manager, A3/Officer sanctioned loan after verifying the records and since they were prosecuted, there is a failure of justice. Hence, I am of the view, as per the dictum of the Apex Court reported in (1993) 2 Crimes HC 250 (Bhurey Singh v. State of UP), non application of mind by the sanctioning authority itself vitiate entire prosecution. Therefore, the Special Court erred in holding that P.W.1 has accorded sanction after applying his mind. The Special Court in Para-33 to 36 of its Judgment, erroneously holding that Ex.P1 the sanction order given by P.W.1 is valid in law and take cognizance of case by this Court is also good in law. It is to be noted that once sanction is vitiated, the cognizance taken by the Court is also vitiated. Hence, I am of the considered view, the entire criminal proceedings against the accused 1 and 3 is non-est in the eye of law.
16.The learned counsel for the appellants submitted that the appellants/A1 & A3 had followed the procedures adopted by the Bank, while sanctioning loan. But the case of the prosecution is that the nine loanees are fictitious persons. But to substantiate the same, the prosecution had not filed any documents and not let in any evidence. While perusing the Documents under Exs.P3 to P133, it has clearly proved that loanees were filled up a form for opening S.B. Account with their specimen signatures and they opened the S.B. Account by depositing Rs.50/- as initial deposit through challan. The loan application, Form No.II, Chitta, Adangal copies said to be submitted by loanees, Hypothecation agreement said to be executed by loanees and guarantor agreement executed by third party and the Demand promissory note for Rs.12,500/- and the debit and credit vouchers and the withdrawal slip, through which, the amount has been disbursed. All those documents are clearly proved that the appellants/A1 and A3 after following the procedures adopted by the Bank, sanctioned the loan.
17.The case of the prosecution is that chitta and adangal documents furnished by the loanees are fabricated documents. To prove the same, they had examined P.W.5-Kollapuri, who was working as Village Menial. He deposed that Exs.P3&P5-chitta and Exs.P4&P6-adangal copies said to be issued by P.W.10-VAO, did not contain the signature of P.W.10. P.W.10-Sivamani, VAO, deposed that documents under Exs.P4, P70, P124-adangal and Ex.P108-chitta, did not contain his signatures. Likewise, P.W.9-Jagadeesan, VAO, deposed that he had not issued Exs.P28-chitta & Adangal, Exs.P48 & P78-chitta and Exs.P79 & P94-adangal. P.W.13 Kannan, who was Village Menial, turned hostile.
18.P.W.3 and P.W.4 stated in their evidence that what are the procedures to be followed, while sanctioning loan. They further stated that the loanees should affix their photographs in their application forms. While perusing the evidence of P.W.6, in his cross-examination, he fairly conceded that there was no space provided in the application forms for affixing photographs. Moreover, the Bank is not able to produce any circular directing that photographs should be obtained from the loanees, while sanctioning loan. It is appropriate to consider the evidence of P.W.6, in his cross-examination, which reads as follows:
.. .. If an account holder avails any loan, the loan transactions will be routed only through his S.B.A/C. The loan applications format filed in this case is common to all the Indian Bank during the relevant period. Prior to 1992, I do not know for how long the above loan application form was in vague. No separate space is provided in the above loan application forms for the affixture of the photos. C.B.I. did not enquire me about any circular from the head office directing that photo should be affixed in the loan application form. During the relevant period for opening an S.B. A/C account holder should pay a minimum sum of Rs.50/- to the Cashier. During the relevant period, Mr.Devendrarao was the Cashier of the above Bank. ..
So non affixing photographs will not a ground for convict the accused as if loan has been sanctioned to the fictitious persons.
19.While considering the evidence of P.W.6, who was working as Branch Manager, deposed that there is a Rural Development Officer for the Bank, who made an enquiry and filed a report in respect of the loanees. But admittedly, those Rural Development Officers were neither arrayed as an accused nor cited as witnesses.
20. P.W.6-Karuppaiah, Branch Manager, in his cross-examination, he stated as follows:
.. The Branch has got Rural Development Officer. He will monitor the credit and debit of the accounts and submitted reports to the Regional Office. ..
He further stated that one Margaret and John theodusicus were the Rural Development Officers during that period. It is pertinent to note that the complaint has been lodged only due to the failure of discharging of loan by the loanees, merely because, the loan amount has not been repaid by the loanees, it is not a ground for prosecuting the Officers, who sanctioned the loan. The burden is upon the prosecution to prove that the loanees are only fictitious persons and that A1 & A3 had conspired with A4, sanctioned loan for fictitious persons. But P.W.11-Devendra rao, who was working as Cashier, fairly conceded that he paid the loan amount to Sevlaraj, one of the loanees, through Ex.P86-withdrawal slip. He stated in his evidence that each loanees had deposited the initial amount of Rs.50/- for opening S.B. Account and put their specimen signatures. It is not the case of the prosecution that the loan has been sanctioned without following the procedure.
21.At this juncture, it is appropriate to consider the evidence of P.W.8-Annamalai and P.W.12-Vivekanandan, who introduced the loanees to open their S.B. Account. P.W.8-Annamalai, is a customer of the Indian Bank, Mappedu Branch and deposed that he introduced the loanees namely, Babu, Selvaraj and Mohan, for opening account in the Bank. P.W.12-Vivekanandan, is a customer of the Bank and in his chief examination itself he stated that A4 is a President of Agricultural Society and he requested him to put his signature in the introducers column for opening S.B. Account for two persons namely, Gopal and Gnanam and at that time, four persons were accompanying with A4. P.W.12 put his signatures in Exs.P58 and P103-S.B. account opening form and specimen signature card. As per the evidence of P.W.12, it is clearly proved that after seeing the persons, he signed in the introducers column.
22.P.W.11-Devendrarao, Cashier, in his chief examination itself he stated that as per Ex.P44-Account opening form, on 3.12.1991, as in the capacity of Cashier, he credited Rs.50/- in the account of Raju and whose S.B.Account Number is 2107 and he affixed his bank seal and put his signature. P.W.11 further stated in his chief examination that he opened S.B. Account in the names of loanees, who deposited Rs.50/- as initial deposit, which shows that the loaness were not a fictitious persons. Furthermore, it is pertinent to note that even though P.W.6 in his evidence, he stated that since the loanees had not repaid the loan amount, notice has been issued to them and the same has been returned, but no document has been filed to show that notice has been sent to the loanees was returned unserved as no such persons, except the oral testimony of P.W.6-Karuppaiah, Manager, no documentary evidence has been filed before the Court, to show that notice has been issued to the loanees. It is also pertinent to note that since nine loanees, who were availed the agricultural loans, were not repaid that amount within time, the Bank take steps to serve notice and before that, they are not even suspecting that the loanees are fictitious persons. The evidence of P.W.8, P.W.11 and P.W.12 would prove that P.W.8 & P.W.12 introduced loanees after seeing them. It shows that on the date of opening savings account by the Bank in the names of loanees, some persons have appeared before the Bank and opened the account in their names. It is not the case of the prosecution that the accused had impersonated themselves as loanees and availed loan.
23.On perusal of Ex.P177-F.I.R., the case has been registered against A1 to A3 for the offences under Sections 120B, 420, 467, 468, 471 IPC and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act. But after investigation, a final report has been filed against four persons for the offences under Sections 120B read with 420, 468, 471, 477A IPC and Sections 13(2) r/w 13(1)(d) of P.C. Act. But at the time of framing charges, the learned Additional Special Judge for C.B.I. Cases, Chennai, framed charges for the offences under Sections 120B read with 420, 419, 467, 467 r/w 471, 468 IPC and 13(2) r/w 13(1)(d) of P.C. Act, against A1 to A3. He also framed charges against A4 for the offences under Sections 419, 467, 468, 467 r/w 471 and 468 r/w 471 IPC and 13(1)(c) and 13(1)(d) r/w 13(2) of P.C. Act.
24. As per the evidence of P.W.11-Cashier, it would clearly prove that the loanees after following the procedures adopted by the Bank submitted their applications and opened S.B. Account by depositing Rs.50/- and availed loan in between 4.10.1991, 6.12.1991 and 25.02.1992. One of the loanees, Selvaraj, personally received the loan amount and in respect of other loanees, the loan amount has been received by A4. P.W.11 further stated that in the withdrawal slip, the account holder can authorise any other person to receive the amount on behalf of him. Likewise, the loanees authorised A4 and on that basis, the amount has been disbursed to A4, merely because A4 received that loan amount and it will not safe to fasten the criminal liability upon A4, because as already stated that P.W.11, who is the Cashier, deposed before the Court that loanees personally appeared before the Bank and opened their S.B. Account. Subsequently, they submitted applications for agricultural loan and after following all the formalities, the loan amount has been deposited in their S.B. Account. The loanees submitted withdrawal slips authorising A4 to receive the loan amount and one of the loanees Selvaraj himself personally received the loan amount. It shows that the prosecution has failed to prove that the loanees are fictitious persons. Therefore, the trial Court erred in framing a charge against the accused A1 to A4 for an offence under Section 419 IPC (i.e.) punishment for cheating by personation and come to a conclusion that the loanees are fictitious persons.
25.One more adding circumstance is that there is a Rural Development Officer for the Bank, who submits a report after verifying the loan documents submitted by the loanees. Since the loan amount was not repaid by the loanees, P.W.2 suspected that the loanees are fictitious persons and the accused 1, 2, 3 conspired with A4 cheated the Bank by impersonation and falsified the bank accounts and gave complaint Ex.P2. It is to be noted that neither the Rural Development Officer submitted the report nor he was examined as a witness before the Court. So non-filing of the report submitted by the Rural Development Officer and non examination of the Rural Development Officer is one of the adding circumstance to disbelieve the case of the prosecution.
26.As per the evidence of P.W.14-A.K.Singh, who is a handwriting expert, verified the specimen signatures of A1 to A4 and gave his opinion under Ex.P173. It is the dictum of the Apex Court that an expert opinion is not a substantial piece of evidence and that the evidence should be corroborated by an independent evidence. But no one corroborate the evidence of P.W.14 and Ex.P173. The investigating agency obtained specimen signatures from P.W.9-VAO, P.W.10-VAO, one Somasundaram, sivaramamudaliar, Kumaresan, Mani, Narayana singh, Vikraman, Arasan, Palanivadivelu, Dilipkumar and Selvaraj and the same were marked as Exs.P134 to P172. In Ex.P173, P.W.14 stated that it is not possible to express any opinion on the handwritings marked in questions on the basis of material at hand. So P.W.14 has not given a firm opinion.
27.In para-43 to 45 of its judgment, it was held by the Special Court that an expert opinion is not corroborated by any other witnesses and that A4 cannot be found guilty for the offence of forgery and once the offence of forgery is not proved by the prosecution against A4, it cannot accept the other allied offences under Sections 467, 468, 467 r/w 471 and 468 r/w 471 IPC are proved by the prosecution beyond reasonable doubt.
28.In para-46 of the Judgment, the learned Special Judge stated that A4 received the amount and he had not denied the same and that itself gives room for suspicion against A4 and it was held that A4 was guilty of the offence under Section 420 IPC. In a criminal jurisprudence, the guilt of the offence against accused shall be proved by the prosecution beyond reasonable doubt, the Court cannot merely on suspicious circumstance, fasten criminal liability against the accused. There is no document to show that A4 was found guilty of the offence of forgery and other offences. The prosecution has not proved that A4 is guilty of the offence under Section 420 IPC beyond reasonable doubt. But A4 was convicted under Section 420 IPC only on the suspicious circumstance. So I am of the view, the Special Court committed an error in convicting the accused for the offence under Section 420 IPC.
29.As already stated that A1 and A3 after following the procedures adopted by the Bank sanctioned the loans, but there is no material to show that the loanees are fictitious persons. A presumption that A1/Manager and A3/Officer had dishonestly by corrupt or illegal means, obtains for themselves or for any other persons any valuable thing or pecuniary advantage or by abusing their positions as public servants, obtains for themselves or for any other person any valuable thing or pecuniary advantage, without evidence. But the evidence of P.W.11 itself proved that A1 and A3 had followed the procedures adopted by the Bank, while sanctioning loan.
30. The learned counsel for the appellants submitted that there was a delay in preferring the complaint and filing the charge sheet and it may vitiate the entire criminal proceedings. To substantiate the same, the learned counsel for the appellant/A3 relied upon the following decisions.
(i) (1981) 3 SCC 610 (State of Maharashtra v. Champalal Punjaji Shah) in para-2, it is held as follows:
2. What is the remedy if a trial is unduly delayed In the United States, where the right to a speedy trial is a constitutionally guaranteed right, the denial of a speedy trial has been held to entitle an accused person to the dismissal of the indictment or the vacation of the sentence. But in deciding the question whether there has been a denial of the right to a speedy trial, the Court is entitled to take into consideration whether the defendant himself was responsible for a part of the delay and whether he was prejudiced in the preparation of his defence by reason of the delay. The Court is also entitled to take into consideration whether the delay was unintentional, caused by over-crowding of the Court's docket or under-staffing of the Prosecutors. Strunk v. United States is an instructive case on this point. As pointed out in the first Hussainara case, the right to a speedy trial is not an expressly guaranteed constitutional right in India but is implicit in the right to a fair trial which has been held to be part of the right to life and liberty guaranteed by Art. 21 of the Constitution. While a speedy trial is an implied ingredient of a fair trial, the converse is not necessarily true. A delayed trial is not necessarily an unfair trial. The question whether a conviction should be quashed on ground of delayed trial depends upon the facts and circumstances of a case. If the accused is found to have been prejudiced in the conduct of his defence and it could be said that the accused had thus been denied an adequate opportunity to defend himself, the conviction would certainly have to go. But if nothing is shown and there are no circumstances entitling the court to raise a presumption that the accused had been prejudiced there will be no justification to quash the conviction on the ground of delayed trial only. (ii) AIR 2008 SC 3077 (Pankaj Kumar v. State of Maharashtra and others) in which, Delayed investigation and the delay of over 8 years was not in any way attributable to appellant.
(iii) AIR 2011 SC 3114 (Rafiq Ahmed @ Rafi v. State of Uttar Pradesh) in which, it is held as follows:
Of course, the Court has to keep in mind that the accused 'must be' and not merely 'may be' guilty of an offence. The mental distance between 'may be' and 'must be' is long and divides vague conjectures from sure conclusions. The learned counsel for the appellant would submit that what is meant by prejudice? The plea of prejudice has to be in relation to investigation or trial and not matters falling beyond their scope. Once the accused is able to show that there is serious prejudice to either of these aspects and that the same has defeated the rights available to him under jurisprudence, then the accused can seek benefit under the orders of the Court.
31.On perusal of Ex.P177-F.I.R., the case was registered on 28.02.1995. But the alleged occurrence was said to have been taken place between 1991 and 1993. Since the loanees has not repaid the loan amount, the Bank suspected and gave Ex.P2 complaint and then, the case was registered. But after investigation, the charge sheet has been filed on 29.01.1999. So since the investigation has been done in respect of the complaint regarding four accused, there may be a possibility for delay in the proceedings. But it will not cause any pre judice to the defence. In such circumstances, the argument advanced by the learned counsel for the appellants that there was an inordinate delay in preferring the compliant and filing the charge sheet, in my opinion, does not merit acceptance.
32.As already stated that P.W.1 accorded sanction without applying his mind, which caused failure of justice and the prosecution has failed to prove that the loanees are fictitious persons. Considering the same, I am of the considered opinion, the Special Court erroneously convicted A1 and A3 for the offences under Sections 120B IPC & 13(2) r/w 13(1)(d) of Prevention of Corruption Act and A4 for the offences under Sections 120B, 419(9 counts) and 420(9 counts) IPC. Hence, I am of the view, the judgment of conviction and sentence passed by the Special Court is liable to be set aside and hence, it is hereby set aside.
33.In fine,
The Criminal Appeals are allowed. Consequently, connected Miscellaneous Petitions are closed. The Judgment of conviction and sentence, dated 10.02.2006 made in C.C.No.5 of 1999 on the file of the learned Additional Special Judge for C.B.I. Cases, Chennai, is hereby set aside. The fine amount paid by the appellants, if any, shall be refunded to them.
Bail bond executed by the appellants/accused, if any, shall stand cancelled.