Criminal Appeal No. 436-DBA of 1996 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Criminal Appeal No. 436-DBA of 1996 Date of Decision : 13.07.2009 The Chandigarh State Cooperative Bank Ltd., through Sh. Gurnam Singh, Managing Director, The Chandigarh State Cooperative Bank Ltd., Sector 22, Chandigarh. ...Appellant Versus 1. Sh. B.K. Arora son of Sh. Ved Parkash Arora, r/o 520, Manimajra, U.T. Chandigarh, Ex-officiating Manager of the Chandigarh State Cooperative Bank Ltd., Chandigarh. 2. Sh. Tarlok Singh, r/o 311, Industrial Area, Chandigarh, Ex- Managing Director of the Chandigarh State Cooperative Bank Ltd., Chandigarh. ....Respondents CORAM: HON'BLE MR. JUSTICE SHAM SUNDER Present: Mr. Rahul Sharma, Advocate, for the appellant. Mr. Jagdeep Bains, Advocate, for respondent No. 1. Mr. S.S. Narula, Advocate, for respondent No. 2. * * * * SHAM SUNDER, J. This appeal, is directed, against the judgement of acquittal, Criminal Appeal No. 436-DBA of 1996 2 dated 22.09.1995, rendered by the Court of Judicial Magistrate 1st Class, Chandigarh, vide which, it acquitted the accused/respondents, for the offence, punishable under Section 420 read with Section 120-B of the Indian Penal Code. 2. The complainant is a banking company, and carries on the business of banking etc. M/s New Link Enterprises, SCF No. 13, Sector 22-D, Chandigarh, was the proprietary concern of V.P. Anand, accused. V.P. Anand, accused, opened a current account, with the complainant bank, on 12.02.1981, with a deposit of Rs. 500/- only. M/s Sales International, Dubai, is a big importers/exporters, in Dubai, while M/s Andhra Merzario Kuwait, with their registered office in Paris, carries on the business of Sea Carriers and Shipping Agents. M/s Merzario Shipping Agencies Pvt. Ltd. Bombay, are the agents of M/s Andhra Merzario, Kuwait. 3. Sometimes, in 1980, M/s New Link Enterprises, through V.P. Anand, accused, imported 11 containers of copper wire scrap of the aggregate value of 3,13,346.25 US dollars, to be delivered, in Bombay, through bill of lading No. N-11, dated 30.11.1990, through M/s Andhra Merzario, Kuwait. V.P. Anand, accused (since deceased), failed to produce the original bill of lading, before M/s Merzario Shipping Agencies Pvt. Ltd., Bombay, duly endorsed by the Shippers, or by M/s Sales International, Dubai. As such, the Shipping Agencies at Bombay, declined to issue delivery orders, in favour of M/s New Link Enterprises. Criminal Appeal No. 436-DBA of 1996 3 4. M/s New Link Enterprises, through V.P. Anand, accused, mis-represented to the Bombay Agents, that the original bill of lading, had been misplaced, or was not traceable. He (Mr. V.P. Anand) offered to give a bank guarantee, for delivery of consignment, without the production of the bill of lading. M/s New Link Enterprises, through V.P. Anand, accused, in order to secure consignment, from the Shipping Agencies at Bombay, without payment, hatched a criminal conspiracy, with B.R. Arora, accused, the then Manager of Chandigarh State Cooperative Bank, Sector 17, Chandigarh, and Tarlok Singh, accused, the then Managing Director of the said bank, to defraud the complainant bank, of 3,13,346.25 US dollars. In pursuance of this criminal conspiracy, V.P. Anand, accused, as proprietor of New Link Enterprises, opened a current account, with the complainant bank, by depositing a sum of Rs. 500/- only, on 12.02.1981. On the same day, he applied to the Manager of the bank, for issuance of bank guarantees, for 3,13,346.25 US dollars and 42,970 US dollars, without furnishing any reason, as to why, and for what purpose, and, in whose favour, the bank guarantees, were required. In pursuance of the said conspiracy B.K. Arora, accused, without seeking any clarification, from him, on 12.02.1981, sought the orders of Tarlok Singh, accused, for the issuance of bank guarantees, as applied for by V.P. Anand, accused. The bank guarantees, were issued by B.K. Arora, accused, without getting tangible security, or pledge of property, from V.P. Anand, accused. The copies of counter bank guarantees, were also not kept, on Criminal Appeal No. 436-DBA of 1996 4 record, by B.K. Arora, accused. On the basis of these two bank guarantees, M/s New Link Enterprises, got the consignment released, from the Shipping Agencies, Bombay. The Shipping Agencies, had not yet been paid 3,13,346.25 US dollars, by V.P. Anand, accused, in respect of bill of lading No. N-11, dated 30.11.1980. However, V.P. Anand, accused, had settled his account, with respect to 42,970 US dollars, but was not ready to pay 3,13,346.25 US dollars. The Shipping Agencies, served a notice upon the complainant bank, calling upon it, to pay a sum of Rs. 50,49,982/-, with interest thereon @ 18 per cent per annum. It was only then that the fraud came to the notice of the complainant bank. The fraud and the criminal conspiracy resulted into creating liability of more than Rs. 50 lacs, of the complainant bank. A criminal complaint for the commission of offences under Section 420 read with Section 120-B of the Indian Penal Code, was, thus, filed by the complainant bank. 5. In preliminary evidence, the complainant bank, examined Warrayam Singh (PW1), and Amar Singh (PW2). The accused, were summoned, for the offences, punishable under Section 420 read with Section 120-B of the Indian Penal Code, by the Court of Chief Judicial Magistrate, vide order dated 11.12.1985. 6. In pre-charge evidence, the complainant, examined Sh. S. Niwasan, Chief Accountant of M/s Merzario Shipping Agency Pvt. Ltd., Bombay (CW1), Kuldip Singh (CW2), and Dharam Pal (CW3). Thereafter, the complainant closed its pre-charge evidence. Criminal Appeal No. 436-DBA of 1996 5 7. During the course of proceedings, in this case, V.P. Anand, accused, died, on 20.09.1993, as a result whereof, the criminal proceedings, were dropped, against him, on 09.11.1993. At that time, the case, was fixed for pre-charge evidence. Charge under Section 420 read with Section 120-B of the Indian Penal Code, was framed, against B.K. Arora, and Tarlok Singh, surviving accused, which was read-over and explained to them, to which, they pleaded not guilty, and claimed judicial trial. 8. In its after charge evidence, the accused further cross- examined Siri Niwasan, Chief Accountant, Merzario Shipping Agencies Pvt. Ltd. (PW1), Kuldip Singh, Senior Assistant, Chandigarh State Cooperative Bank (PW2), and Dharam Pal, Clerk, Chandigarh State Cooperative Bank (PW3). Thereafter, the complainant closed its evidence. 9. The statements of the accused, under Section 313 of the Code of Criminal Procedure, were recorded. They were put all the incriminating circumstances, appearing against them. They pleaded false implication. It was stated, by them, that the complaint, was filed, against them, at the instance of their opposite group, working in the complainant bank. 10. In defence evidence, the accused examined Onkar Nath (DW1), and Karam Singh (DW2). Thereafter, they closed their defence evidence. 11. After hearing the Counsel for the parties, and, on going Criminal Appeal No. 436-DBA of 1996 6 through the evidence, on record, the trial Court, acquitted the accused. 12. Feeling aggrieved, the instant appeal, was filed by the complainant/appellant. 13. I have heard the Counsel for the parties, and have gone through the evidence, and record of the case, carefully. 14. The Counsel for the complainant/appellant, submitted that the trial Court, was wrong, in coming to the conclusion that, no offence, punishable under Section 420 read with Section 120-B of the Indian Penal Code, was made out. He further submitted that B.K. Arora, accused, the then Officiating Manager, Chandigarh State Cooperative Bank Ltd., issued bank guarantees, for 3,13,346.25 US dollars, and 42,970 US dollars, in favour of V.P. Anand, accused No. 1, who has since demised, after obtaining some bribe, without seeking any clarification from him, on 12.02.1981. He further submitted that these bank guarantees, were issued by B.K. Arora, the then Manager, in connivance with Tarlok Singh, the then Managing Director of the bank, without getting tangible security or pledge of property, from V.P. Anand. He further submitted that, even copies of counter bank guarantees, were also not kept, on record, by B.K. Arora, accused. He further submitted that, on the basis of those bank guarantees, V.P. Anand, Proprietor of M/s New Link Enterprises, accused (since demised), got the consignment released, from Shipping Agencies, Bombay, without payment of 3,13,346.25 US dollars, in respect of bill of lading No. N-11, dated 30.11.1980. He further submitted that, the Criminal Appeal No. 436-DBA of 1996 7 Shipping Agencies, served a notice, on the bank calling upon them, to pay a sum of Rs. 50, 49, 982/-, with interest @ 18 per cent per annum, and, at that time, fraud came to the notice of the bank that B.K. Arora, and Tarlok Singh, accused, hatched a conspiracy, and defrauded the bank of a sum of Rs. 50 lacs. He further submitted that, had both these officials been diligent enough, they would have certainly obtained counter bank guarantees, and sought necessary clarifications, before issuance of the bank guarantees, in favour of V.P. Anand, proprietor of M/s new Link Enterprises. He further submitted that, right from the very beginning, the intention of V.P. Anand, was to cheat the bank, and B.K. Arora, as also Tarlok Singh, accused, hatched a conspiracy with him, to facilitate the cheating by him. He further submitted that the judgement of acquittal, recorded by the trial Court, was liable to be set aside. 15. On the other hand, the Counsel for B.K. Arora, and Tarlok Singh, respondents, submitted that, both of them acted, in the due discharge of their official duties. They further submitted that, if there was violation of instructions, issued by the bank, by both these respondents then, it could not be said that, right from the very beginning, they had dishonest intention, in conspiracy with each other, to facilitate the cheating of the bank by V.P. Anand, accused (since deceased), in the sum of Rs. 50 lacs. They further submitted that, no wrongful gain, was caused, to the accused, on account of the cheating committed by V.P. Anand, accused (since deceased). They further Criminal Appeal No. 436-DBA of 1996 8 submitted that Tarlok Singh, the then Managing Director of the bank, did not issue the bank guarantees. He only sanctioned the proposal, for issuance of bank guarantees, against pledge. They further submitted that the judgement of acquittal, rendered by the trial Court, is liable, to be upheld. 16. After giving my thoughtful consideration, to rival contentions, raised by the Counsel for the parties, in my considered opinion, no fault, can be found, with the judgement of acquittal, recorded by the trial Court. Even otherwise, it is settled principle of law, that the Appellate Court, should not interfere with the judgement of acquittal, recorded by the trial Court, until and unless, it comes, to the conclusion, that the same was perverse, or illegal, or the result of complete mis-reading of evidence. For constituting the offence, punishable under Section 420 of the Indian Penal Code, the complainant, was required to prove that, right from the very beginning, there was dishonest or fraudulent mis-representation to a person, whereby that person, was made to deliver the property. The question arises whether B.K. Arora, and Tarlok Singh, accused, hatched a conspiracy with V.P. Anand (since deceased), to facilitate the cheating. V.P. Anand, accused (since deceased), applied for the issuance of bank guarantees. B.K. Arora, was the Bank Manager, at that time. He put up the proposal, before the Managing Director, who approved the same, against the pledge of property. Thereafter, the bank guarantees, in favour of V.P. Anand, accused (since deceased), were issued, by B.K. Criminal Appeal No. 436-DBA of 1996 9 Arora, Bank Manager. There is nothing, on the record, that these bank guarantees, were issued by B.K. Arora, with dishonest intention, or any wrongful gain, was caused, to him, on account of the issuance of the bank guarantees. There is no evidence, on record, that he took bribe from V.P. Anand, accused, to issue the bank guarantees. No doubt, B.K. Arora, failed to obtain the pledge of the property of V.P. Anand, at the time of issuance of bank guarantees, as per the resolution DW2/1, passed by the complainant bank. V.P. Anand, accused (since deceased), however, executed a counter guarantee DW3/1, in favour of the complainant bank, which was equally good, if pledge of the property, was not there, in favour, of the said bank. At the most, it could be said, that B.K. Arora was negligent, in the performance of his duties. He in violation of the provisions of resolution, referred to above, issued the bank guarantees, without obtaining the pledge of the property of V.P. Anand, accused (since deceased). The fact, as to whether, B.K. Arora, was having any dishonest intention, at the time of issuance of the bank guarantees, without obtaining the pledge of the property, from V.P. Anand, accused (since deceased), was not proved, from the evidence, on record. If there was any violation of the instructions, issued or the provisions of the resolution, passed by the complainant bank, by B.K. Arora, accused, that was not sufficient, to fasten any criminal liability, upon him, for the commission of offence, punishable under Section 420 read with Section 120-B of the Indian Penal Code. He neither had any criminal intent, at the time of issuance Criminal Appeal No. 436-DBA of 1996 10 of the bank guarantees, nor conspired with V.P. Anand, at that time. He, therefore, did not commit the offence, under Section 420 read with Section 120-B of the Indian Penal Code. 17. Coming to the liability of Tarlok Singh, accused, as stated above, he was the Managing Director of the Bank, at the relevant time, and when the proposal for issuance of bank guarantees, was put up, before him, he approved the same subject to obtaining the pledge of property. There are resolutions DW2/1, and DW2/2, dated 27.12.1978, passed by the said bank, authorizing the Manager of the Bank, to issue bank guarantees, against the pledge of property, and further authorizing the Managing Director, to verify the property offered, by the societies and individuals, as security. At the most, Tarlok Singh, could be said to have acted negligently, by not verifying, as to whether, the property, had been pledged by V.P. Anand, accused (since deceased), at the time of issuance of bank guarantees, as directed, by him. Such negligence, on his part, did not amount to dishonest intention, or hatching of conspiracy with V.P. Anand (since deceased). There is nothing, on the record, that he took any money, from V.P. Anand, accused (since deceased), for not verifying this fact. If he committed any negligence, or violated any resolution of the bank, or the instructions, issued by it, from time to time, he could not be held liable for the commission of any criminal offence. No criminal liability, therefore, could be fastened upon him, for such an act. In nutshell, it could be said, that both B.K. Arora, and Tarlok Singh, accused, were correctly held to be not liable, Criminal Appeal No. 436-DBA of 1996 11 for the commission of offences, punishable under Sections 420 read with Section 120-B of the Indian Penal Code, by the trial Court. 18. The judgement of acquittal, recorded by the trial Court, is based, on the correct appreciation of evidence, and law, on the point. The same cannot be said to be perverse, or illegal, in any manner. No ground, is made out, to interfere with the same. 19. No other point, was urged, by the Counsel for the parties. 20. For the reasons recorded above, the appeal, being devoid of merit, is dismissed. 13.07.2009 (SHAM SUNDER) AMODH JUDGE