IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 11.03.2011 C O R A M The Honourable Mr.Justice P.R.SHIVAKUMAR Criminal Appeal Nos.511 and 550 of 1999 Crl.A.No.511 of 1999 Barath Rai (A3) ... Appellant Vs. Deputy Superintendent of Police C.B.I. Chennai (Rc.No.10/S/90) ... Respondent PRAYER: Criminal Appeal filed under Section 374 of the Criminal Procedure Code against the sentence and judgment passed by the learned First Additional Sessions Judge and Chief Judicial Magistrate, Coimbatore in C.C.No.32/1992 dated 28.06.1999 and set aside the same. For Appellant : Mr.D.Krishnan For Respondent : Mr.N.Chandrasekaran Spl P.P. for CBI Cases Crl.A.No.550 of 1999 1.T.Ramaswamy (A1) 2.K.Venkataswamy (A2) 3.M/s.Aliyar Paper Mills P. Ltd., through its Managing Director Ramaswamy, the first accused ... Appellants/Accused 1, 2 & 4 Vs. State represented by Deputy Superintendent of Police C.B.I., Madras (Rc.No.10/S/90) ... Respondent/Complainant PRAYER: Criminal Appeal filed under Section 374 of the Criminal Procedure Code against the sentence and judgment passed by the learned First Additional Sessions Judge and Chief Judicial Magistrate, Coimbatore in C.C.No.32/1992 dated 28.06.1999 and set aside the same. https://hcservices.ecourts.gov.in/hcservices/ For Appellants : Mr.D.Shiva Kumaran For Respondent : Mr.N.Chandrasekaran Spl P.P. for CBI Cases These two criminal appeals have arisen out of the judgment of the trial court, namely the court of the First Additional Sessions Judge-cum-Chief Judicial Magistrate, Coimbatore dated 28.06.1999, made in C.C.No.32/1990, convicting the appellants in both the appeals for the offences with which they stood charged before the trial court. Therefore, both the appeals were taken up for joint hearing and are now being disposed of by this common judgment. 2. T.Ramaswamy, K.Venkataswamy and M/s.Aliyar Paper Mills Private Limited, who were A1, A2 and A4 in C.C.No.32/1990 on the file of the First Additional Sessions Judge-cum-Chief Judicial Magistrate, Coimbatore, are the appellants in Crl.A.No.550/1999. Bharat Rai, who figured as A3 in the above said C.C.No.32/1990 is the sole appellant in Crl.A.No.511/1999. 3. There were totally five charges framed against the accused persons. The first, third and fifth charges were framed against all the appellants (A1 to A4), whereas the second and fourth charges were framed against appellants 1 and 2 in Crl.A.No.550/1999 (A1 and A2). The details of the charge are as follows:- a) Charge No.1:- All the appellants (A1 to A4) committed an offence of criminal conspiracy with the object of cheating punishable under Section 120-B IPC r/w 420 IPC. b) Charge No.2:- Appellants 1 and 2 in Crl.A.No.550/1999 (A1 and A2) committed an offence punishable under Section 420 IPC by cheating the Indian Bank, Pollachi Branch to the tune of Rs.4,27,946/- by preparing bogus consignment bills and discounting the same with the said bank. c) Charge No.3:- Appellants 1 to 3 in Crl.A.No.550/1999 (A1, A2 and A4) and the appellant in Crl.A.No.511/1999 (A3) committed an offence of criminal conspiracy to forge documents for the purpose of cheating the Indian Bank, Pollachi Branch to the tune of Rs.4,27,946/- punishable under Sections 120-B r/w 468 IPC. d) Charge No.4:- Appellants 1 and 2 in Crl.A.No.550/1999 (A1 and A2) committed the offence of forgery for cheating punishable under Section 468 IPC by forging and fabricating invoices, delivery challans and consignment note and bills in respect of 13 consignments for the purpose of discounting the same with the Indian Bank, Pollachi branch. e) Charge No.5:- Appellants 1 to 3 in https://hcservices.ecourts.gov.in/hcservices/ Crl.A.No.550/1999 (A1, A2 and A4) and the sole appellant in Crl.A.No.511/1999 (A3) committed an offence of using forged documents as genuine for the purpose of cheating punishable under Section 471 IPC r/w 468 IPC. 4. All the appellants (A1 to A4) pleaded not guilty and hence a trial was conducted. At the conclusion of trial, the learned First Additional Sessions Judge cum Chief Judicial Magistrate, found all the appellants herein (A1 to A4) guilty of the offences as per the charges stated supra, convicted them and punished them with the following punishments. Name of the Offences for which Sentence imposed Accused convicted T.Ramaswamy (A1) 120-B r/w 420 IPC Rigorous imprisonment and (charge No.1) for 1 year and a fine of K.Venkataswamy (A2) Rs.500/- with a default sentence of simple imprisonment for three months, in case of failure to pay fine 420 IPC Rigorous imprisonment (charge No.2) for 5 years and a fine of Rs.1,000/- with a default sentence of simple imprisonment for three months, in case of failure to pay fine 120-B r/w 468 IPC Rigorous imprisonment (charge No.3) for 1 year and a fine of Rs.500/- with a default sentence of simple imprisonment for three months, in case of failure to pay fine 468 IPC Rigorous imprisonment (charge No.4) for 5 years and a fine of Rs.1,000/- with a default sentence of simple imprisonment for three months, in case of failure to pay fine 471 r/w 468 IPC Rigorous imprisonment (charge No.5) for 5 years and a fine of Rs.1,000/- with a default sentence of simple imprisonment for two months, in case of failure to pay fine https://hcservices.ecourts.gov.in/hcservices/ Bharath Rai (A3) 120-B r/w 420 IPC Rigorous imprisonment (charge No.1) for 1 year and a fine of Rs.500/- with a default sentence of simple imprisonment for three months, in case of failure to pay fine 120-B r/w 468 IPC Rigorous imprisonment (charge No.3) for 1 year and a fine of Rs.500/- with a default sentence of simple imprisonment for three months, in case of failure to pay fine 471 r/w 468 IPC Rigorous imprisonment (charge No.5) for 5 years and a fine of Rs.1,000/- with a default sentence of simple imprisonment for two months, in case of failure to pay fine M/s.Aliyar Paper Mills 120-B r/w 420 IPC A fine of Rs.500/- Private Limited (A5) (charge No.1) 120-B r/w 468 IPC A fine of Rs.500/- (charge No.3) 471 r/w 468 IPC A fine of Rs.1,000/- (charge No.5) (A4-M/s.Aliyar Paper Mills Private Limited, being a company, fine imposed on it was directed to be paid by its Managing Director, namely A1-T.Ramaswamy) 5. Challenging the conviction and sentence A3-Bharat Rai has filed Crl.A.No.511/1999 and A1-T.Ramaswamy, A2-K.Venkataswamy and A4-M/s.Aliyar Paper Mills Private Limited have filed Crl.A.No.550/1999, on various grounds set out in the respective appeal petitions. 6. The story of the prosecution, in brief, is as follows:- i) One Thiru.Nallusamy was the Manager of Pollachi branch of Indian Bank during the period from 1985 to 1988. M/s.Aliyar Paper Mills Private Limited (A4) was maintaining a current account in the said branch of Indian Bank during the above said period. Over Draft and Bill discounting facilities were also extended to A4- company for which separate accounts were maintained. For the said https://hcservices.ecourts.gov.in/hcservices/ purpose, an agreement, a copy of which has been marked as Ex.P110 and a promissory note, a copy of which has been marked as Ex.P111 were executed in favour of the Indian Bank. During the relevant period A1-T.Ramaswamy was the Managing Director of M/s.Aliyar Paper Mills Private Limited (A4). He had been authorised by a resolution of the Board of Directors of the said company, a copy of which has been marked as Ex.P77 to make remittance into and draw money from the account of M/s.Aliyar Paper Mills Private Limited. An Authorisation Deed was also given to him under Ex.P78. He was authorised to draw up to Rs.15.00 Lakhs by using the Bill Discounting facility. ii) It was the practice of M/s.Aliyar Paper Mills Private Limited to send paper bundles through lorries and submit to the Indian Bank, Pollachi branch, the Lorry Receipts, Invoice, Hundi, Insurance policy if the consignment was insured and a letter specifying the amount to be paid to the bank. The bank in turn would debit the amount shown in the bill from the Bill Purchase Account and credit the same in the current account of M/s.Aliyar Paper Mills Private Limited. After such debit and credit as aforesaid, the documents relating to the consignment would be sent to the branch of either the Indian Bank or any other bank at the place of business of the consignee, where the consignment was intended to be delivered. On receipt of the above said documents, the bank at the place of the consignee, would send intimation to the consignee requiring the consignee to make payment of the bill amount and get the Lorry Receipt, Invoice, Insurance policy and the Hundi with proper endorsement evidencing payment of the bill amount so that the consignee could take delivery of the goods from the transport office making payment of the amount mentioned as freight charges in the Lorry Receipts alone. With the help of the said documents alone, the consignee could take delivery of the goods from the lorry office. iii) The above said arrangement was going on smoothly till 06.07.1985. Thereafter, since M/s.Aliyar Paper Mills Private Limited had been extended with such credit facilities, A1 to A4 and another person by name C.C.K.Venkatachalam hatched out a conspiracy to cheat the said bank. In pursuance of the said conspiracy, 13 bogus bills to the tune of Rs.4,27,946/-, were prepared in respect of 13 consignments allegedly despatched to (1) Meenakshi Paper Stores, No.61, First Agraharam Street, Salem, run by P.W.1-Subbiah, (2) Meyyappa Paper Stores, No.55, Anderson Street, Chennai run by P.W.4-Muthuraman (3) Vimala Trading Company, No.131, Big Bazaar Street, Kumbakonam run by P.W.5-Durairajan and (4) Pelicon Papers, No.233, Big Bazaar Street, L.G.B.Complex, Coimbatore, through M/s.Cargo Movers of India, whose name is found in the list of lorry transporters approved by Indian Bank Association with a code number “CAC-241”, discounted those bills with the Pollachi branch of Indian Bank and thus cheated the said bank to the tune of Rs.4,27,946/-. The details of the above said consignments regarding which forged/false Lorry Receipts were produced are as follows:- https://hcservices.ecourts.gov.in/hcservices/ Sl. No. Date and Bill No. of the Company Invoice No. & Date Consignment Note Office of Issue Destin -ation Amount Consignee 1) 0179/85 25-7-85 1957 dt.29-7-85 M/s.Aliyar Paper Mills Ltd.Pollac hi Salem 18036.00 Meenakshi Paper Stores, 61, First Agraharam, Salem-636001 2) 0180/85 -do- 1958 -do- -do- -do- 18036.00 -do- 3) 0181/85 -do- 1959 -do- -do- -do- 18036.00 -do- 4) 0182/85 -do- 1960 -do- -do- -do- 18036.00 -do- 5) 0183/85 -do- 1961 -do- -do- -do- 18036.00 -do- 6) 0123/85-86 6.7.85 2129 dt.6.7.85 -do- Madras 87937.00 Meyappa Paper Stores, 55, Anderson Street, Madras-1 7) 0124/85-86 -do- 2130 -do- -do- -do- 59113.00 -do- 8) 0231/85-86 17.8.85 1980 dt.17.8.85 -do- Kumbak onam 22782.00 Vimala Trading Company, 131, Big Bazaar Street, Kumbakonam, 9) 0163/85-86 22.7.85 2145 dt.21.7.85 -do- -do- 57736.00 -do- 10) 0162/85-86 22.7.85 2144 dt.22.7.85 -do- -do- 57356.00 -do- 11) 0327/85-86 8.10.85 2007 dt.8.10.85 -do- Coimba tore 14154.00 M/s.Pelicon Papers, No.233, Big Bazaar St., LGB Complex, Coimbatore 12) 0328/85-86 8.10.85 2008 dt.8.10.85 -do- -do - 19344.00 -do- 13) 0329/85-86 8.10.85 2009 dt.8.10.85 -do- -do - 19344.00 -do- TOTAL 4,27,946.0 0 -do- iv) After the bills relating to each one of the above said 13 consignments were discounted with the Indian Bank, Pollachii branch, the Lorry Receipts, Bills and the consignment papers were sent to (1) the Manager of State Bank of Travancore, Salem in respect of the consignments made to Meenakshi Paper Stores, Salem, (2) Indian Bank, Esplanade Branch, Chennai in respect of the consignments made to Meyyappa Paper Stores, Chennai, (3) Indian Bank, Kumbakonam in respect of the consignments made to Vimala Trading Company, Kumbakonam and (4) Indian Bank, Coimbatore in respect of the consignments made to Pelicon Papers, Coimbatore, respectively, for collection of the bill amounts from the consignees concerned. When the consignees were intimated by the Branch Managers of the above said banks, the consignees failed to honour the bills by making payment and therefore the bills were returned to Indian Bank, Pollachi branch. On enquiry, it was found that there was no transport undertaking in the name of M/s.Cargo https://hcservices.ecourts.gov.in/hcservices/ Movers of India, having its operation in Tamil Nadu and that the materials were actually sent to the consignees through M/s.Indian Transport Industries with the help of A3-Bharath Rai and one Venkatachalam, referred to above and not through M/s.Cargo Movers of India. It was also found that the consignees concerned got delivery of the goods from the office of the above said transporters, namely M/s.Indian Transport Industries after making payment of the freight charges and adjusted the bill amounts against the advance paid by them to A4 - M/s.Aliyar Paper Mills Private Limited and that the same was the reason for their failure to honour the bills in respect of the advice received by them from the concerned branches of the State Bank of Travancore and Indian Bank, as the case may be. As such, all the above referred 13 bills were returned to Indian Bank, Pollachi branch without the amount covered by them being realised. The fact of the non-payment of the bill amounts by the consignees was informed to A4 - M/s.Aliyar Paper Mills Private Limited by a letter marked as Ex.P81. A1- Ramaswamy (since deceased), Managing Director of M/s.Aliyar Paper Mills Private Limited, was also informed of the fact and was requested to immediately arrange for payment of the bill amounts together with interest immediately under letters marked as Exs.P82 to P84. In the last of such letters it was also informed that the lorry offices were incurring demurrages regarding the un-cleared goods and the charges for the same and also that the charges for re-booking the goods should be borne by A4 - M/s.Aliyar Paper Mills Private Limited. v) Though A1-Ramaswamy, on behalf of A4 - M/s.Aliyar Paper Mills Private Limited, sent replies to the above said letters undertaking to repay the amount, they failed to do so. Realising the fact that the bank had been cheated by the accused persons, P.W.21-Nallusamy, the then Manager of Indian Bank, Pollachi Branch, lodged a complaint, marked as Ex.P106 on the file of the Pollachi West Town Police Station on 28.04.1986 against A1-T.Ramaswamy (deceased) and M/s.Cargo Movers of India, Calcutta for an alleged offence punishable under Section 420 IPC. Based on the said complaint, Ex.P107 – First Information Report was prepared and a case was registered in Cr.No.229/1986 for the offence under Section 420 IPC against A1-T.Ramaswamy (deceased) and M/s.Cargo Movers of India, Calcutta on the file of the said police station. Initially, the investigation was done by one Mr.K.P.Selvarajan, Inspector of Police, Pollachi Town Circle. Subsequently, the Superintendent of Police, Coimbatore District (Rural) by his order dated 01.07.1986 transferred the case to the file of District Crime Branch, Coimbatore (Rural) pursuant to which the case was re-registered as DCB Crime No.2/1986 on the file of the District Crime Branch, Coimbatore (Rural) for the very same offence against the very same persons. Thereafter, P.W.19 – Thiru.Rajendran, the then Inspector of Police, District Crime Branch, Coimbatore, conducted further investigation, collected materials and examined most of the witnesses. During the course of his investigation, A1-T.Ramaswamy (deceased) was arrested on 02.03.1989 and was sent for remand. https://hcservices.ecourts.gov.in/hcservices/ 7. Thereafter, the Superintendent of Police, Coimbatore (Rural District) submitted a report to the Director General of Police, Chennai and based on the said report, the Director General of Police, Chennai passed an order under Ex.P108 dated 28.12.1998 directing transfer of the investigation of the said case to Central Bureau of Investigation. Consequent to the said order of the Director General of Police, P.W.22-Mr.M.Gopalan, Inspector of Police, Central Bureau of Investigation, re-registered the case as R.C.No.10/S/1990 for which he prepared an altered First Information Report under Ex.P112. A copy of the letter addressed by the Director General of Police to the Superintendent of Police, Special Crime Branch, Central Bureau of Investigation, Chennai has also been produced as Ex.P113. Then P.W.22 took up the investigation and examined some of the witnesses and thereafter handed over the investigation file to P.W.25 - Thiru.Jegannathan, Deputy Superintendent of Police, Central Bureau of Investigation, for further investigation. P.W.25 – Jegannathan, during the course of his investigation conducted a search in the office of A3-Bharath Rai on 08.01.1991 and seized nine documents under Ex.P126-Search List. Similarly, the office of M/s.India Transport Industries Pvt. Limited at door No.126, Kilpauk Garden, Chennai was also searched and certain documents were recovered. Specimen signatures of A1 to A3 were obtained under Ex.P124 series. The said documents were sent to P.W.23 - H.M.Saxena, Handwriting Expert, along with the signatures found in the seized documents marked as Ex.P115 to P123. P.W.25, the Deputy Superintendent of Police, Central Bureau of Investigation, on conclusion of his investigation, submitted a final report alleging commission of offences punishable under Sections 120-B r/w 420 IPC, 420 IPC, 468 IPC and 471 r/w 468 IPC by the appellants herein (A1 to A4) and one Venkatachalam. 8. In the said final report, among accused, A1 to A3 herein were ranked in the same manner. Venkatachalam was arraigned as accused No.4 and M/s.Aliyar Paper Mills Private Limited (at present A4) was arraigned as A5. The learned First Additional Sessions Judge cum Chief Judicial Magistrate took it on file as C.C.No.32/1992. On issuance of summons, the persons originally arraigned as A1 to A3 and A5 alone entered appearance and Venkatachalam, who had been arraigned as A4 did not appear. Hence by an order made in Crl.M.P.No.862/1992, the case against the said Venkatachalam alone was split up and de-linked from the main case and separately numbered as C.C.No.2/1993. Pursuant to the splitting up of the case relating to the said Venkatachalam from the main case, the array of the remaining accused in the main case was modified by ranking M/s.Aliyar Paper Mills Private Limited as A4 instead of the original rank as "A5" and retaining the ranks of the other three, namely A1-Ramaswamy, A2-K.Venkataswamy and A3-Bharath Rai as A1 to A3. Thereafter on being questioned regarding the allegations made against them in the final report, the appellants herein (A1 to A4) pleaded not guilty. The learned trial judge framed necessary charges, five in number, as indicated supra. When https://hcservices.ecourts.gov.in/hcservices/ the charges were read over and explained to the accused, namely A1 to A4 (appellants herein), they again pleaded not guilty and hence the trial was conducted. 9. In order to prove its case, the prosecution examined 25 witnesses as P.Ws.1 to 25 and marked 126 documents as Exs.P1 to P126 on its side. No material object was produced. After completion of the recording of evidence adduced on the side of the prosecution, the attention of the appellants herein (A1 to A4) were drawn to the incriminating materials found in the evidence adduced on the side of the prosecution and they were questioned regarding the same under Section 313(1)(b) of Cr.P.C. The appellants herein (A1 to A4) submitted that the evidence adduced against them were false and reiterated their stand that they were innocent. One witness was examined as D.W.1 on the side of the appellants herein/accused 1 to 4 and no document was produced on their side. However, the covering letter for Ex.P125 (expert’s opinion) was marked as a court document and was assigned the mark Ex.C1. 10. After hearing the arguments on both sides, the learned First Additional Sessions Judge cum Chief Judicial Magistrate considered the evidence and upon such consideration, came to the conclusion that the appellants herein/accused 1 to 4 were guilty as per the charges, convicted them and sentenced them with punishments as indicated supra. Challenging the conviction and sentence, these two criminal appeals have been filed on various grounds set out in the appeal petitions. 11. The point that arises for consideration in these appeals is as follows:- " Whether the prosecution has not proved the charges against the appellants/accused 1 to 4 beyond reasonable doubt, as contended by the appellants in these appeals and whether or not the judgment of the court below is liable to be interfered with in respect of both the conviction and sentence or in respect of the sentence alone?" 12. This court heard the arguments advanced by Mr.D.Krishnan, learned counsel for the appellant in Crl.A.No.511/1999, by Mr.D.Shivakumaran, learned counsel for the appellants in Crl.A.No.550/1999 and by Mr.N.Chandrasekaran, learned Special Public Prosecutor for CBI cases representing the respondent, perused the materials available on record and paid its anxious considerations to the same. 13. The gist of the prosecution story, is, as follows:- https://hcservices.ecourts.gov.in/hcservices/ A1 – Mr.T.Ramaswamy (since deceased), the then Managing Director of M/s.Aliyar Paper Mills Private Limited and the other accused persons, namely A2 to A4 and also one Venkatachalam, the accused in the split up case, entered into a criminal conspiracy to cheat Indian Bank, using Bill Discounting facilities extended to A4 – M/s.Aliyar Paper Mills Private Limited. In furtherance of the conspiracy, forged and bogus bills were raised regarding 13 consignments as if finished paper goods were sent through M/s.Cargo Movers of India and the said bills to the tune of Rs.4,27,946/-, were discounted with the Indian Bank, Pollachi branch. The said transport operator M/s.Cargo Movers of India, was not having its operation in Tamil Nadu during the relevant period. The bank was cheated of the said amount by despatching the consignments through other transporters and sending the genuine lorry receipts and bills directly to the consignees so as to enable them to claim and get the consignments from the office of the transporters without the knowledge of Indian Bank. Based on the said story of the prosecution, the appellants/accused 1 to 4 were accused of committing the offences for which charges were framed and they were made to face trial before the trial court. 14. Though all the three appellants in Crl.A.No.550/1999 (A1, A2 and A4) and the sole appellant in Crl.A.No.511/1999 (namely A4) were convicted by the trial court and all of them have chosen to challenge the conviction as well as the sentence by preferring appeals, the charge as against the first appellant in Crl.A.No.550/1999 (A1) stands abated, since he died on 15.05.2002 and on production of a copy of the death certificate and also on confirmation of the same by the respondent, the same was recorded. Hence, in these appeals the sustainability of the conviction of the sole appellant in Crl.A.No.511/1999 (A3) and appellants 2 and 3 in Crl.A.No.550/1999 (A2 and A4) alone has got to be considered. Hereafter the term appellants shall mean the above said appellants alone. 15. It is the contention of the learned counsel for the appellants in Crl.A.No.550/1999 (A2 and A4) that there was no criminal conspiracy, as alleged by the prosecution; that it is not correct to state that M/s.Cargo Movers of India is not existing in Tamil Nadu as the same is not a transport company having its operations in Tamil Nadu; that the said transport operator might have used their franchisees at various places wherein they did not have their offices; that only through the said transport operator, namely M/s.Cargo Movers of India, the goods relating to the consignments concerned in this case were sent; that if at all any mischief was committed, the same could have been done by the transport operator in making delivery of the consignments to the consignees without insisting upon the production of the lorry receipts and the bills with endorsements for the payment of the invoice amount; that some of the consignees, because of the financial instability of M/s.Aliyar Paper Mills Private Limited perceived by them, wanted M/s.Aliyar paper Mills Private Limited (A4) to adjust the deposits they had made towards the price of the consignments; that they had even asked for the return of the https://hcservices.ecourts.gov.in/hcservices/ balance amount after adjusting the price of the consignments from the deposits; that under such circumstances alone, the fourth accused, namely M/s.Aliyar Paper Mills Private Limited had to settle the claim of the bank either directly or by re-directing the goods to other dealers/customers and that under such circumstances it is incorrect to state that there was any part played by any of the appellants in Crl.A.No.550/1999 in the alleged conspiracy or in the alleged forging/fabricating of documents. It is the further contention of the learned counsel for the appellants in Crl.A.No.550/1999 that the Central Bureau of Investigation, initially chose to implicate P.W.21-Nallusamy, the then Manager of Indian Bank, Pollachi branch, as one of the conspirators and that subsequently, for the reasons best known to the Central