THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY Crl.P.No.6941 of 2008 ORAL ORDER: This Criminal Petition is ﬁled under Section 482 Cr.P.C. seeking to quash proceedings in C.C.No.40 of 2007 on the ﬁle of the Special Judge for C.B.I. Cases at Hyderabad registered for oﬀences punishable under Sections 120-B, 420 and 471 IPC and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 so far as the petitioner (A2 in the case) is concerned. Whereas the petitioner is A2, the respondent is the complainant in the calendar case. For the sake of convenience, the parties hereinafter are referred to as they arrayed in the calendar case. It is a case of A2 Former Manager of Punjab National Bank, Sanathnagar branch, Hyderabad conspiring with A1 in the case who was the former Senior Regional Manager of the Punjab National Bank, Hyderabad and misusing the oﬃcial positions and granting loans fraudulently to A3 Managing Director of M/s Annapurna Auto Pvt. Ltd., to a tune of Rs.146.51 lakhs and credit limits and achieving their object of gaining monetarily. It is contended on behalf of A2 by Sri C.Padmanabha Reddy, senior counsel, that the prosecution has listed 37 persons as witnesses and also ﬁled 102 documents with regard to the case, but none of the witnesses stated any thing against A2. It is further contended by him that as per the corresponding F.I.R. (8) persons including the then Senior Branch Manager Sri C.N.Sudheer, A1 and A3, were shown as accused, but however when the charge sheet was ﬁled, the name of the Senior Branch Manager i.e. C.N.Sudheer was deleted and A2 (the petitioner) who was only subordinate to the Senior Branch Manager C.N.Sudheer and who was accordingly acting under the instructions of his boss was implicated in the case. Further, A3 used to deal with senior level oﬃcers at the Zonal Oﬃce and branch. Further, as per the record, the credit facility that was extended to A3 and others was arranged by A1 and the then Senior Branch Manager C.N.Sudheer. Further, therefore the question of A2 entering into criminal conspiracy with the other accused does not arise at all. According to him, as per the record, he acted only as an appraiser, by reason of which just he had to go through relevant papers and forward them to his higher authority for necessary veriﬁcation and sanction without any application as to the genuineness of the entries therein and also the genuineness of the corresponding mortgages. It is further contended by him that even prior to the registration of F.I.R. during the year 2003, an audit was conducted by the zonal oﬃce of Punjab National Bank in respect of the loan account of A3 through Sri P.S.Rao who held in his report that the oﬃcials responsible for the lapses were A1, A2 and others without implicating A2. Ultimately, he has pleaded to discharge A2 from the case on the ground that there is no incriminating material against him. On the other hand, it is the contention of learned Special Public Prosecutor appearing for the A.C.B. that the prosecution record amply proves prima facie the complicity of A2 in the case because every relevant record was passed through him and necessary orders were passed only on his recommendations and unless necessary trial is conducted, it cannot be said that he is innocent. According to him, A2 was under obligation because of his job to verify the genuineness of various documents processed by him and also the properties mortgaged correspondingly in connection with his job before recommending for granting the loans to A3. He has drawn the attention of the Court to various specific allegations made against him. The point for consideration is whether there are suﬃcient grounds to quash the proceedings in the calendar case insofar as A2 is concerned. Emphatically, as per the prosecution record, A3 applied for export packing credit limit of Rs.34.00 lakhs to the Senior Manager, Punjab National Bank on 27.1.2002 and A2 conducted credit appraisal of the party and recommended the packing credit limit of Rs.30.00 lakhs to M/s Annapurna Auto Pvt. Ltd., in respect of which, clariﬁcation was sought on the ground that it was uneconomical, but in the meanwhile on 26.3.2002 A1 passed an order permitting the Branch Manager to extend the packing credit limit of Rs.30.00 lakhs and in addition to that, A3 approached A1 for the enhancement of credit limit from Rs.30.00 lakhs to Rs.45.00 lakhs and without any veriﬁcation, A1 involved in the enhancement of credit limit and accordingly, the Branch Manager, Punjab National Bank, Sanathnagar branch through his letter dated 20.4.2002 released the sum of Rs.45.00 lakhs in favour of A3 on showing false equitable mortgage in respect of certain property. Further, A3 approached for an overdraft of Rs.25.00 lakhs against mortgage of immovable property and A2 forwarded the proposal dated 18.10.2001 recommending for the sanction of the amount, though in fact that property was already mortgaged to M/s Lakshmi Vilas Bank, Habsiguda branch for obtaining certain other facilities. Further, A1 sanctioned a loan of Rs.20.00 lakhs on the request of A3 in favour of M/s Usha Goutami Batteries, a concern of A3 and another on a mortgage of property, whereas the corresponding credit facility was also apprised by A2. The allegations made in the charge sheet clearly provide that A2 apprised and sent necessary proposals for the sanction of various loans in favour of A3 or his concerns. What is important here at this stage is whether there is prima facie case against A2 or not. When the prosecution record provides that he acted as appraiser and processed the record and recommended for the sanction of the loans, it is diﬃcult to come to a conclusion that he innocently did those acts. As per internal Circular No.45/2000 dated 22.9.2000 issued by the Inspection and Control Division, New Delhi; “Appraisal is carried out at the grass root level i.e. at branches. At times, techno-economic appraisal is also carried out by Technical Officer. Proper scrutiny/verification of ﬁnancial statements, projections, status and credentials of the proponents obtained from the market or other sources and other basic aspects of the proposal such as whether the business is within the framework of the credit policy of the bank, normally prescribed by Reserve Bank of India, Government and other Regulatory Bodies, would be the responsibility of the appraising authority/officer.” As appraiser, it is his responsibility to go through the genuineness of the contents of the records and also genuineness of the properties given as securities for the repayment of the loans sanctioned or to be sanctioned. The word appraiser does not mean just forwarding of papers innocently as a postman whose responsibility is just to deliver postal correspondence to the addressees given therein. Unless, he was satisﬁed with the genuineness of the transactions including the genuineness of the corresponding properties, there was no question of forwarding the relevant papers to the concerned authorities with recommendations for necessary sanctions. Further, simply because his boss though cited as accused in the case, at the outset was dropped for one reason or the other, that circumstance is not suﬃcient to exonerate him from the consequential criminal prosecution. However, the concerned Court is at liberty to examine the question of implication of Sri C.N.Sudheer basing upon the material available suo moto or on the application of the defacto complainant as per law. Everybody, who got involvement in the alleged conspiracy and the loss of funds of the bank should be prosecuted subject to availability of necessary material and also subject to relevant legal provisions. Therefore, I am of the opinion that there is incriminating material against A2 and he is liable to be prosecuted for the alleged oﬀences and hence the question of discharging him from the case at this stage does not arise at all. In the result, the petition is devoid of merits and is accordingly dismissed. ________________________ G.KRISHNA MOHAN REDDY, J Date: 18.11.2011 DA THE HON’BLE SRI JUSTICE V.ESWARAIAH AND THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY Crl.A.No.1547 of 2007 .10.2011