IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 28.03.2011 Coram: THE HONOURABLE MR.JUSTICE K.N.BASHA CRL.RC.No.163 of 2010 R.Ashok Karnad .. Petitioner -Vs- State rep. By The Inspector of Police, SPE, CBI, ACB, Chennai. .. Respondent PRAYER: Revision filed u/s.397 and 401 Cr.P.C., to call for the records against the judgment dated 8.2.2010 passed by the learned II Additional Sessions Judge, Chennai in Crl.A.No.126/2009, confirming the judgment dated 8.7.2009 passed by the learned Additional Chief Metropolitan Magistrate, Egmore, Chennai in C.C.No.4703/2007 and setaside the same. For Petitioner : Mr.B.Sriramulu, Senior Counsel for M/s.R.Thiagarajan. For Respondent : Mr.N.Chandrasekaran Spl. Public Prosecutor for CBI O R D E R The revision petitioner, the sole accused in this case, has come forward with this revision challenging the judgment of conviction and sentence passed by the learned Additional Chief Metropolitan Magistrate, Egmore, Chennai dated 8.7.2009 made in C.C.No.4703/2007, convicting the revision petitioner for the offence under Section 420 IPC and sentencing him to undergo 1 year rigorous imprisonment and to pay a fine of Rs.2,000/- in default to undergo 3 months simple imprisonment and also convicting him for the offence under Section 468 r/w. 471 IPC and sentencing him to undergo 1 year rigorous imprisonment and to pay a fine of Rs.2,000/- in default to undergo 3 months simple imprisonment and the sentences are ordered to run concurrently, as confirmed by the judgment of the learned II Additional Sessions Judge dated 8.2.2010 made in C.A.No.126/2009. 2. The case of the prosecution is that the accused is the Managing Director of M/s. Alacrity Housing Ltd., (hereinafter https://hcservices.ecourts.gov.in/hcservices/ referred to as "M/s.AHL"). During the year 2000, M/s.AHL proposed to develop 168 flats complex called 'Prasan' at Adambakkam, Chennai and out of which 101 flats were reserved for the allotment for their own employees. Accordingly M/s.AHL arranged loan for 61 employees from CITI Bank. They have also availed loan from UCO Bank prior to the availing of loan from CITI Bank by mortgaging 50% of the undivided share of the land. As against the security of the remaining 50% of the undivided share of the same land M/s.AHL availed loan from the CITI Bank. As M/s.AHL felt that the CITI Bank charged higher rate of interest, the company approached the State Bank of India, Special Housing Finance Branch (SHFB) to take over loans in respect of 61 employees. Accordingly, the State Bank of India, SHFB has taken over 30 housing loans of the employees of M/s.AHL from the CITI Bank, Anna Salai, Chennai and the State Bank of India, Tidel Park Branch took over 17 housing loans of employees from the CITI Bank, Anna Salai and issued bankers cheques for closing the loan accounts of the employees of M/s.AHL. The bankers cheques, Exs.P32 to P35, have been handed over to the representative of M/s.AHL at the instance of the accused namely the Managing Director of M/s.AHL. In respect of the bankers cheques, Exs.P32 to P35, instead of depositing the pay orders in the loan account, the word “A/c Alacrity” was inserted after CITI Bank NA and deposited with CITI Bank, Chennai into the current account of M/s.AHL, instead of closing the loan accounts of employees and thereby caused a wrongful loss of Rs.13,63,331/- to the State Bank of India, Tidel Park Branch and he has made wrongful gain and thereby committed the offences punishable under Sections 420 and 468 r/w. 471 IPC. 3. F.I.R was registered in this case by one P.K.Nair, PW10, Inspector of Police, C.B.I, Anti Corruption Branch, Chennai on source information in Crime No.R.C.MA1 2004 A 18 for the offence under Section 120B r/w. 420 IPC and under Section 13(2) r/w. 13(1)(d) of the Prevention of Corruption Act, 1988. Exs.P60 is the F.I.R. Four accused have been named in the F.I.R namely (i) Sri.T.Purushothaman, then Chief Manager, SHFB and presently working as AGM, SBI, T.Nagar, Chennai (ii) Shri Selvaraj, Manager, SHFB, Chennai (iii) Shri Panchatcharam, then Manager, SBI, Tidel Park Branch (iv) M/s.Alacrity Housing Ltd., represented by its Directors. It is pertinent to note at this stage that the name of the revision petitioner/accused was not mentioned in the F.I.R, either mentioning his name or mentioning his designation as Managing Director. 4. PW10 took up the investigation and examined PW2 and other officers of State Bank of India, Tidel Park Branch and other bank officials of CITI Bank and also examined PWs.4 to 8, the employees of M/s. AHL and collected number of documents. Thereafter, the investigation was taken up by one Ambol, Inspector of Police, CBI, Chennai and the investigation was again transferred to PW11. PW11, examined PW9, who was working in the CITI Bank, Chennai. After https://hcservices.ecourts.gov.in/hcservices/ completion of investigation, PW11 filed the charge sheet against the revision petitioner/accused, dropping other accused namely A1 to A3, bank officials mentioned in the F.I.R. 5. The prosecution, in order to substantiate its case, examined PWs.1 to 11 and filed Exs.P1 to P60. 6. When the accused was questioned under Section 313 of the Criminal Procedure Code in respect of the incriminating materials appearing against him through the evidence adduced by the prosecution, the accused has come forward with the version of total denial. He has not examined any witness on his side, but marked the documents Exs.D1 to D5. 7. The Trial Court, on consideration of the evidence adduced by the prosecution, has found the accused guilty and convicted and sentenced him as stated above. The conviction and sentence imposed by the Trial Court are confirmed by the lower Appellate Court. Hence the present revision. 8. Mr.B.Sriramulu, learned Senior Counsel appearing for the revision petitioner/accused, while assailing the impugned judgment of conviction has vehemently contended that the prosecution has miserably failed to prove its case by adducing clear and consistent evidence and put forward the following contentions: (i) The name of the accused was not mentioned in the F.I.R and only the company M/s.AHL is mentioned as A4, represented by its Directors and there is no specific allegation made against the accused in the F.I.R. (ii) Merely because the accused happens to be the Managing Director of M/s.AHL, he cannot be implicated for the offences alleged against him, in the absence of any specific and definite allegation mentioned in the F.I.R or in the evidence adduced by the prosecution. (iii) The accused also cannot be vicariously held liable, even assuming the company namely M/s.AHL committed any offence, in the absence of any specific provision under any statute. (iv) None of the witnesses has implicated the accused in respect of the offences alleged against him. PW9, who was working in the CITI Bank, Chennai, alone made a vague reference to the accused to the effect that he used to clarify from the accused and as well as from other persons of the Company as to which loan account the bankers cheque https://hcservices.ecourts.gov.in/hcservices/ have to be credited. (v) PW9 admitted in his cross examination that if there is any interpolation or correction in the cheque, the cheque will not be honoured and it is also admitted by PW9 that the bankers cheques namely Exs.P18 to P35 were deposited in the regular course of disbursement. (vi) The evidence adduced by the prosecution through PWs.1 to 9 does not disclose the ingredients of the offence under Section 420 IPC, as it is not the case of any witness that the accused made any false representation with dishonest intention to cheat anyone much less the State Bank of India, Tidel Park Branch. (vii) There is absolutely no evidence available on record to implicate the accused for the offence of forgery as it is not the version of any witness to the effect that the revision petitioner/accused has forged the bankers cheques, Exs.P32 to P35. (viii) PW10, the Investigating Officer has admitted in his cross examination that he has not collected any specimen signature or any specimen handwriting from the petitioner or any other person. (ix) PW11, another Investigating Officer has admitted in his cross examination that he had sent Exs.P32 to P35 to the Principal Scientific Officer, Central Forensic Science Lab (CFSL), Chennai and the report of the CFSL does not confirm the forgery. PW11 has sent only the specimen signature of PW1 and one Mr. Purushothaman and Selvaraj, who are the State Bank of India officials. The learned Senior Counsel also placed reliance on the following decisions: (1) S.K.Alagh v. State of Uttar Pradesh and Others reported in (2008) 5 SCC 662. (2) Maksud Saiyed v. State of Gujarat and Others reported in (2008) 5 SCC 668. (3) Keki Hormusji Gharda and Others v. Mehervan Rustom Irani and Another reported in (2009) 4 MLJ (Crl) 1055 (SC). (4) Maharashtra State Electricity Distribution Co. Ltd. & Anr. v. Datar Switchgear Ltd. & Ors. reported in 2011 1 L.W.(Crl) 18. https://hcservices.ecourts.gov.in/hcservices/ 9. Per contra, Mr.N.Chandrasekaran, learned Special Public Prosecutor for CBI contended that there is no infirmity or illegality in the impugned judgment of conviction. It is contended that the prosecution has proved its case by adducing clear and cogent evidence. It is further contended that Exs.P32 to P35, bankers cheques clearly show that there is an interpolation by mentioning "A/c Alacrity" after the words CITI Bank NA and PW1, who was working as Branch Manager, SBI, Tidel Park Branch and who has signed the said bankers cheques clearly stated that none of the bank officials written in Exs.P32 to P35 mentioning as "A/c Alacrity" after writing CITI Bank NA. PW2, another Manager of the very same Bank, stated that none of the bank officials mentioned in Exs.P32 to P35, the word "A/c Alacrity". The learned Special Public Prosecutor further contended that PW3, who was the Chief Manager of SBI, SHFB, also stated in his evidence that cheques given for the purpose of clearing the loans of the employees of M/s.AHL in the CITI Bank not reached the accounts of the said employees. PW4, the employee of M/s.AHL also stated that the loan was sanctioned in his name but the cheque was given in the name of M/s.Alacrity Housing Limited and as such, the said bank loan was not cleared. Therefore, the learned Special Public Prosecutor would contend that by inserting the word "A/c Alacrity" in the bankers cheques, Exs.P32 to P35 instead of crediting into the loan accounts of the employees, credited into the accounts of M/s.AHL and thereby the accused caused wrongful loss to the SBI and correspondingly made wrongful gain for himself. It is further pointed out by the learned Special Public Prosecutor for CBI that PW6, who was also an employee of M/s.AHL stated that the loan accounts of the employees were cleared by M/s.AHL after selling the lands to M/s. Jain Housing and Construction Limited. It is submitted that the CITI Bank loan amounts were cleared during the pendency of the Trial as the entire sum was paid by M/s.Jain Housing and Construction Limited on 10.7.2006, as mentioned in the trial Court judgment and it is contended that the mere repayment of the loan under a settlement cannot absolve the accused from the charges in the criminal case. The learned Special Public Prosecutor contended that the prosecution has established the offence of cheating and forgery against the accused. 10. I have given my careful and anxious consideration to the rival contentions put forward by either side and thoroughly scanned through the entire materials available on record and perused the impugned judgment of conviction. 11. At the outset, it is to be stated that the prosecution case revolved around the allegation of insertion of the words "A/c Alacrity" in the bankers cheques Exs.P32 to P35 issued by the State Bank of India, Tidel Park Branch, Chennai, in favour of CITI Bank. A perusal of the said bankers cheques Exs.P32 to P35 reveals that the https://hcservices.ecourts.gov.in/hcservices/ above said four bankers cheques have been issued by the State Bank of India, in favour of CITI Bank NA and after the words "CITI Bank NA", the disputed words “A/c Alacrity” are seen in all the four bankers cheques. It is pertinent to note that the crux of the allegation, as per the charge framed against the revision petitioner/accused, is that by inserting the words “A/c Alacrity” in the above said bankers cheques, Exs.P32 to P35, after the words CITI Bank NA, the cheques were deposited in the account maintained by M/s.AHL with CITI Bank instead of depositing in the borrowers loan account namely in the account of loanees, who are the employees of M/s.AHL and thereby the accused committed wrongful loss to the State Bank of India, Tidel Park Branch, Chennai to the tune of Rs.13,63,331/- and corresponding wrongful gain for himself and thereby committed the offence punishable under Sections 420 and 468 r/w.471 IPC. The fact remains that neither the loanees namely the employees of M/s.AHL nor the State Bank and CITI Bank Officials have been aggrieved and they have not given any complaint against the Company namely M/s.AHL much less against the accused, who is the Managing Director of the said Company. 12. A perusal of the F.I.R reveals that the complaint was preferred by the Inspector of Police, CBI, ACB, Chennai on the basis of the source information. As already pointed out, the F.I.R was registered in the name of four accused namely (i) Sri.T.Purushothaman, then Chief Manager of SHFB and presently working as AGM, SBI, T.Nagar, Chennai (ii) Shri.Selvaraj, Manager, SHFB, Chennai (iii) Sri Panchatcharam, then Manager, SBI, Tidel Park Branch (iv) M/s.Alacrity Housing Ltd., represented by its Directors. The name of the revision petitioner/accused was not mentioned in the F.I.R and in the F.I.R, it is also not mentioned that the Company/A4 namely M/s.AHL represented by its Managing Director. It is also relevant to note that totally 18 bankers cheques, Exs.P18 to P35 have been issued by the State Bank of India, Tidel Park Branch and the dispute is only in respect of four bankers cheques, Exs.P32 to P35 and in respect of earlier other bankers cheques, amounts have already been cleared and the amounts relating to the disputed four bankers cheques have been cleared subsequently. It is also specifically mentioned in the F.I.R itself that the State Bank of India, Tidel Park Branch had taken over the loan sanctioned by the CITI Bank, as M/s.AHL felt that the CITI Bank was charging more interest rate, as per the efforts taken by M/s.AHL and M/s.AHL also mortgaged its property namely 50% of the undivided share of land, which was already given as security to the CITI Bank. Therefore, it is crystal clear that M/s.AHL shouldered the responsibility of settling the dues to the State Bank of India, Tidel Park Branch in respect of the loans taken for the loanees, who are the employees of M/s.AHL. Though it is alleged by PWs.1 to 3 that the disputed writings were not made by the bank officials, that by itself would not go to prove that the disputed writings were made by the accused. It is the prosecution https://hcservices.ecourts.gov.in/hcservices/ version that the accused committed the offence of cheating by forging the cheques viz., Exs.P30 to P35, by inserting the word "A/c Alacrity". Therefore, once the prosecution failed to prove the offence of forgery, the charge for the offence of cheating would automatically collapse. 13. Now, let me consider the allegations levelled against the accused for the offence under Section 420 IPC. In order to attract the ingredient of the offence of cheating, it is the burden of the prosecution to establish that the accused has made any false representation with the dishonest intention to cheat even at the very inception of the transaction. It is relevant to refer the principle laid down by the Hon'ble Apex Court in Hira Lal Hari Lal Bhagwati v. CBI reported in 2003 SCC (Cri) 1121, wherein the Hon'ble Apex Court has held as under; “ To hold a person guilty of cheating as defined under section 415 of the I.P. Code, it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise with an intention to retain the property. In other words, Section 415 of the I.P.Code which defines cheating, requires deception of any person (a) inducing that person to:(i) to deliver any property to any person, or (ii) to consent that any person shall retain any property, or (b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person, anybody's mind, reputation or property. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases, the inducing must be fraudulent or dishonest. In the second class of acts, the inducing must be intentional but not fraudulent or dishonest.” 14. In yet another decision, the Hon'ble Apex Court in Hridaya Ranjan Prasad Verma v. State of Bihar reported in AIR 2000 SC 2341, held that, “Section 415 I.P. Code which defines cheating requires: (1) deception of any person ; (2)(a) fraudulently or dishonestly inducing that person; (i) to deliver any property to any person; or (ii) to consent that any person shall retain any property; or (b) intentionally inducing that person to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property.” https://hcservices.ecourts.gov.in/hcservices/ The principles laid down by the Hon'ble Apex Court in the decisions cited supra are squarely applicable to the facts of the instant case as in the instant case also, it is not the case of the prosecution that the accused made any false representation with dishonest intention to cheat anyone and the evidence adduced by the prosecution through PWs.1 to 3, State Bank of India officials, PWs.4 to 8, employees of M/s.AHL and PW9, CITI Bank official, does not disclose the ingredients of the offence of cheating against the accused in this case. There is not an iota of evidence available on record to implicate the accused for the offence of cheating and as such, this Court has no hesitation to hold that the prosecution has miserably failed to prove the offence of cheating against the revision petitioner/accused. 15. The next allegation of the prosecution is to the effect that the accused inserted or added the words “A/c Alacrity” after the words CITI Bank NA written in the bankers cheques issued by the State Bank of India, Tidel Park Branch and deposited in the account maintained by M/s.AHL with CITI Bank instead of depositing in the borrowers loan account namely the accounts of the loanees who are the employees of M/s.AHL. As already pointed out, even as per the case of the prosecution with a view to avoid exorbitant interest rate to be paid to the CITI Bank, M/s.AHL has approached the State Bank of India and the State Bank of India taken over the said loans and as a matter of fact M/s.AHL also mortgaged 50% of the undivided share of its land and as such, it is pointed out earlier that M/s.AHL has shouldered the responsibility of settling the dues to the State Bank of India. In my considered view, the insertion of the words “A/c Alacrity” itself would not make out any offence much less the offence of cheating or forgery as the accused/revision petitioner has not derived any personal advantage much less pecuniary advantage. 16. Now the remaining crux of the question involved in this matter is as to who is responsible for making such insertion of "A/c Alacrity" in the bankers cheques, Exs.P32 to P35 issued by State Bank of India, Tidel Park Branch, Chennai after the words CITI Bank in the said cheques. A perusal of the evidence of PW1 disclose that PW1 categorically stated in his Chief Examination that he has issued the disputed bankers cheques Exs.P32 to P35 apart from other remaining bankers cheques namely Exs.P18 to P31. It is stated by PW1 that the said bankers cheques have been issued by the State Bank of India to clear the housing loans obtained by M/s.AHL for its employees from the CITI Bank. It is also stated by PW1 that he has handed over the said bankers cheques to one Ashish Aroor, who was working in M/s.AHL. The prosecution has not examined the said person. It is stated by PW1 that Exs.P1 to P17 are the statement of loan accounts in respect of the employees of M/s.AHL and except the disputed four bankers https://hcservices.ecourts.gov.in/hcservices/ cheques, Exs.P32 to P35, the amounts have been settled in respect of other bankers cheques. It is the version of PW1 that the words “A/c Alacrity” was not written by any one from his bank namely State Bank of India. It is further stated by PW1 that the contents of the bankers cheques Exs.P18 to P35 were filled by a Clerk by name Jayalakshmi. Even the said Jayalakshmi was not examined by the prosecution. It is suggested by the defence to PW1 that the insertion of the words “A/c Alacrity” was made only by PW1. 17. PW2, another bank official of the State Bank of India, has stated that none of his officials written the words “A/c Alacrity” in the bankers cheques Exs.P32 to P35. According to him, the said cheques were signed by PW1. PW3, another State Bank of India official has stated that the loan sanctioned by the State Bank of India is a taken over loan to clear the dues to the CITI Bank and the said loans were transferred to the State Bank of India, Tidel Park Branch on 4.2.2003. He has stated in the cross examination that in respect of the said loan transactions, he was not having any direct knowledge and as such his evidence is not helpful to advance the case of the prosecution. 18. As far as the employees of M/s.AHL namely Pws.4 to 8 are concerned, their evidence do not disclose any incriminating material against the accused. It is categorically stated by PW4 that M/s.AHL obtained loan for 99 employees. It is further stated by PW4 that M/s.AHL has taken the responsibility of settling the housing loans in respect of the loans obtained by the employees. PW4 has also admitted in his cross examination that he has not received any demand notice either from the State Bank of India or from the CITI Bank and on enquiry he came to know that the amount was already settled by M/s.AHL. PW5, another employee of M/s.AHL has admitted that he has not received any demand notice either from the CITI Bank or from the State Bank of India. It is also further stated by PW5 in the chief examination that M/s.AHL taken over the responsibility of settling the dues to the State Bank of India in respect of his loan account. PW6, yet another employee of M/s.AHL has admitted in his cross examination that he has not received any demand notice in respect of dues either from the State Bank of India or from the CITI Bank. It is also stated by PW6 in his chief examination that his employer M/s.AHL has settled the dues in respect of the loan accounts by selling the property to M/s.Jain Housing Limited. PW7 has also stated in his chief examination that his loan account was settled by his employer M/s.AHL. In the cross examination, he has admitted that he has not received any demand notice to settle the dues either from the CITI Bank or from the State Bank of India. PW8, another employee of M/s.AHL has also admitted in his cross examination that he has not received any demand notice in respect of the dues of the loan amount either