M. Jayarajan vs The Central Bureau of Investigation

Anand Byrareddy, J.—The petitioner is one of the accused in a pending case for offences punishable under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (Hereinafter referred to as the ''PC Act'', for brevity) and under Sections 120-B, 420, 468 and 471 of the Indian Penal Code, 1860.

It is alleged that the petitioner, when he was working as the Divisional Manager, Vijaya Bank, Moore Street branch, Chennai, one M/s. Mevida Steels Private Limited, Chennai, had sought for grant of certain credit facilities. The said request is said to have been forwarded by the petitioner to his higher-ups for consideration. However, the petitioner''s superiors are said to have declined to consider the same favourably and was said to have been rejected. However, there was a subsequent reconsideration of the request, though not at the instance or recommendation of the petitioner, whereby the requested credit facility is said to have been provided. The said party having defaulted in servicing the facility and it having been found latently that the said party did not meet the eligibility conditions for availing such facility and hence it was alleged that the officials of the bank, including the petitioner were liable to be punished for offences as aforesaid.

On being summoned by the Special Court, before which the criminal proceedings were initiated, the petitioner having invoked Section 227 of the Code of Criminal Procedure, 1973 (Hereinafter referred to as the ''Cr.P.C., for brevity), the said court, by the impugned order, has rejected the prayer of the petitioner to be discharged from the proceedings. It is that which is under challenge.

The learned Senior Advocate Shri C.V. Nagesh, appearing for the counsel for the petitioner would contend that the settled law on the point in issue in the present case is that, whether the material brought on record by the investigating authority in the form of a final report submitted before the Court, if read as unrebutted evidence in the case, the same should inspire confidence in the mind of the Court that the case would end in a judgment of conviction or that it would give rise to a strong suspicion with regard to the complicity of the accused in the offences complained, as indicated in the final report submitted to the Court. The material pressed into service by the prosecution insofar as the petitioner is concerned is to the effect that the petitioner had recommended to his higher-ups for grant of the credit facility in favour of the Company and that the proposal given by the petitioner came to be declined by his higher-ups for one reason or the other and thereafter the petitioner had made the said recommendation, without going into details about the credit worthiness of the company and therefore, the petitioner was also to be fastened with the criminal liability under Section 120-B of the Indian Penal Code, 1860 (Hereinafter referred to as the ''IPC, for brevity). The trial court not having considered the material on record in the present case, in proper perspective, is illegal and contrary to the authoritative pronouncements of the Apex Court. The erroneous approach made by the trial Court to the material brought on record in the case has resulted in the trial Court passing the impugned order, which is unsustainable in law and is liable to be set aside.

That the ingredients constituting commission of the offence punishable under Section 120-B of the IPC are found lacking for the petitioner to have been fastened with the liability of prosecution for the offence punishable under the provisions of the PC Act, either directly or with the aid of Section 120-B of the Indian Penal Code. And without adverting to the material brought on record in the case, the trial Judge has proceeded to pass the impugned order, directing framing of charges against the petitioner, which is, therefore, unsustainable in law.

That though the petitioner had no role whatsoever to play in the matter of subsequent sanction of the credit facility sought for by the applicant company, which has been arraigned as the fourth accused, the petitioner, in discharge of his duty as a Senior Executive of the Bank, had put all the efforts that are needed in the matter of the recovery and did recover the entire liability of the borrower. This would belie the contention of the prosecution that the petitioner is a conspirator in the commission of the crime along with the other accused.

That the material on record would further indicate that after the sanction of the credit facility sought for by the applicant company, despite there being no direction to the petitioner to obtain the security needed, the petitioner to protect the interest of the institution, has done so. This conduct of the petitioner, by no stretch of imagination, could be said as an act of conspiracy. The trial Judge, without adverting to this portion of evidence, which is available-pit record in the case, has mechanically chosen to proceed with the framing of charges against the petitioner.

More particularly, the learned Senior Advocate has produced copies of documents which are available before the court below and which would, on a plain perusal, indicate that the recommendation made by the petitioner had been declined, in the Executive Director, a superior officer of the petitioner having categorically turned down the proposal and the petitioner, had subsequently proceeded to accord sanction to the proposal, which has been duly seconded by the Chairman and Managing Director of the bank. It is therefore sought to be demonstrated that the petitioner was neither in a position to approve or sanction any facility in favour of any party and hence the petitioner ought to be discharged in the pending proceedings.

The learned Senior Advocate, Shri C.H. Jadhav, appearing for the respondent, CBI, on the other hand, would seek to point out that having regard to the scope and depth of examination of the record, at the stage of proceeding to frame charges, the case of the prosecution being examined thread bare on merits, is not contemplated. Shri C.H. Jadhav does not deny the contents of the documents that are placed before this court. But it is sought to be pointed out that the present petitioner was the Divisional Manager and the Branch head of the particular branch of the concerned bank. The specific allegation against him is that he had facilitated the Managing Director of M/s. Mediva Steels Private Limited, (Accused no. 5) to open a Current Account with the bank, in the name of the Company, (Accused no. 4) without proper introduction. Even though the company was a new client and had a liability of over Rs. 1.20 crore with UCO bank, he had processed the proposal of the company on the same day and forwarded to the office of the Assistant General Manager and zonal head with a favourable recommendation. And contrary to the sanction, had issued the inland letter of credit in favour of a non-existing M/s. Meenakshi Steels instead of M/s. Annapoorna Agencies and M/s. Shivashakti Steels.

It is seen that the petitioner has made a recommendation dated 24.2.1990, Exhibit D-11, to sanction the credit limit facility. And followed by a further letter dated 12.3.1990 that pending the receipt of a credit worthiness report called for from the bankers of the concerned party, the credit facility sought for be sanctioned.

United Commercial Bank, the banker of the borrower has submitted a report as per Exhibit D-13, dated 13.3.1990. Since the report was seen to be negative, the proposal was turned down by the Deputy General Manager as per his opinion dated 20.3.1990, (Exhibit D-13).

However, by a further opinion of the Executive Director dated 22.3.1990, a decision is taken to sanction the facility. The same is approved by the Chairman and Managing Director of the Bank as on 4.4.1990.

It is also on record that as per the statement of a former branch manager, UCO Bank, dated 8.4.2000, the concerned company had cleared the entire loan, with UCO bank during October-November 1990 itself.

It is therefore evident that the material brought on record by the Investigating Officer in the form of a final report submitted before the Court, if read as unrebutted evidence, it would lead to some doubt against the petitioner and his complicity in the commission of the offences as alleged in the final report, though peripherally-but yet requiring the petitioner to stand trial.

In the above light of the matter the petition is rejected.