M.Sulfiker vs State Of Kerala

R. Narayana Pisharadi, J

The revision petition, Crl.R.P.No.692/2019, is filed by the first accused in the case C.C.No.20/2016 pending in the Court of the Enquiry Commissioner and Special Judge, Kozhikode. The revision petition, Crl.R.P.No.725/2019, is filed by the seventh accused in that case. The petition, Crl.M.C.No.5286/2018, is filed by the third and the eighth accused in that case.

The petitioners shall be hereinafter referred to also as the accused, according to their rank in the case.

There are altogether eight accused in the case. The offences alleged against them are punishable under Section 13(1) (d) read with 13(2) of the Prevention of Corruption Act, 1988 (for short 'the Act') and also under Section 120B of the Indian Penal Code.

The first accused was the Senior Clerk and the second accused was the Manager of the Kondotty Evening Branch of the Manjeri Co-operative Urban Bank Limited (hereinafter referred to as 'the Bank') during the period from 09.11.2000 to 01.06.2002. Accused 3 to 5 and 8 were Junior Clerks in the Bank during that period. Accused No.7 was the Assistant Secretary of the Bank in the Head Office at Manjeri. Accused No.6 is a private person and he was not a public servant.

The prosecution case against the accused can be briefly stated as follows: During the period between 09.11.2000 and 01.06.2002, huge amount of money was collected from the Centurian Bank through the accounts opened in the Bank in the name of the sixth accused and also through fictitious accounts. The transfer of money was effected under the Instant Money Transfer Scheme (IMTS). There occurred shortage, to the tune of Rs.3,56,165/-, in the collection of the commission due to the Bank in the above transactions. When the Reserve Bank of India took action against the Bank for conducting transactions in violation of the banking norms, the Bank had to pay a penalty of Rs.5,00,000/-to the Reserve Bank of India. Thus, the Bank sustained a total loss of Rs.8,56,165/-. The shortage in the collection of the commission was caused by accused 1 to 5, 7 and 8. The acts leading to such shortage were committed by them pursuant to a conspiracy hatched by them with Accused No.6 with a view to get undue pecuniary advantage.

The summary of the allegations against the accused is stated in the charge-sheet filed in the case as follows:

"During the period from 09.11.2000 to 01.06.2002, A-1 being the Senior Clerk, A-2 being the Manager, A-3, A-4, A-5 and A-8 being the Junior Clerks of Manjeri Co-operative Urban Bank Ltd. 1726, Kondotty Evening Branch and A-7 being the Asst.Secretary of Manjeri Co-operative Urban Bank Ltd.No.1726, Head Office, Manjeri, as such being the public servants had entered into criminal conspiracy with A-6, abused their official position and in furtherance of the said conspiracy, transferred huge sum of money under the Instant Money Transfer Scheme through Manjeri Co-operative Urban Bank Ltd., Kondotty Evening Branch and caused pecuniary loss of Rs.3,56,165/- by short realisation of Bank commission. Since the accused flouted the direction of Reserve Bank of India, the RBI imposed a fine of Rs.5,00,000/-to the Bank and the Bank remitted the fine amount. Thus the accused caused pecuniary loss of Rs.8,56,165/- to the Bank and corresponding gain of Rs.3,56,165/- to A-6."

The case was originally pending in the Court of the Enquiry Commissioner and Special Judge, Thrissur. Then, the first accused had filed an application for discharge (Crl.M.P.No.608/2014) in that court under Section 239 of the Code of Criminal Procedure, 1973 (for short 'the Code'). Accused No.7 had also filed similar application (Crl.M.P.No.609/2014) in that court for the same relief. As per the order dated 21.01.2016, the Special Court dismissed the above applications.

Subsequently, the case was transferred to the Court of the Enquiry Commissioner and Special Judge, Kozhikode and that court framed charge against the accused in the case.

The first and the seventh accused have filed the present revision petitions praying that the charge framed against them by the Special Court may be set aside.

Accused 3 and 8 have filed Crl.M.C No.5286/2016 under Section 482 of the Code, praying that the final report filed against them and the charge framed against them by the Special Court may be set aside.

Heard the learned senior counsel who appeared for the petitioners and also the learned Public Prosecutor.

The charge framed against the accused by the Special Court is extracted below:

"Firstly:- That, accused one to five and eight amongst you (A1 M. Sulfiker, A2 M.Hassan, A3 C.M.Shabeer, A4 M.C.Sainul Abideen, A5 K.P.Abdul Rasheed and A8 R.V.Sunil Kumar), being public servants employed as Senior Clerk, Manager and Junior Clerks respectively at Manjeri Co-operative Urban Bank Limited, Evening Branch, Kondotty and seventh accused K.K.Mohammed Faizal amongst you, a public servant who was serving as Assistant Secretary at Manjeri Co-operative Urban Bank Limited, Head Office, Manjeri, along with sixth accused amongst you, a non public servant, during the period between 09.11.2000 and 01.06.2002, entered into a criminal conspiracy to make illegal monetary gain for you all by corrupt or illegal means or otherwise abusing the official position of accused 1 to 5,7 and 8 amongst you and causing loss to the Manjeri Co-operative Urban Bank Limited and all of you thus committed the offence of criminal conspiracy punishable under Section 120B of the Indian Penal Code in respect of offence under Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act (49 of 1988).

Secondly:- That, accused one to five and eight amongst you (A1 M.Sulfiker, A2 M.Hassan, A3 C.M.Shabeer, A4 M.C.Sainul Abideen, A5 K.P. Abdul Rasheed and A8 R.V.Sunil Kumar), being public servants employed as Senior Clerk, Manager and Junior Clerks respectively at Manjeri Co-operative Urban Bank Limited, Eveneing Branch, Kondotty and seventh accused K.K.Mohammed Faizal amongst you, a public servant who was serving as Assistant Secretary at Manjeri Co-operative Urban Bank Limited, Head Office, Manjeri, during the period between 09.11.2000 and 01.06.2002, in pursuance of the criminal conspiracy hatched by all accused, including sixth accused, abused your official position with the dishonest to obtain illegal monetary gain for you all, transferred huge sums of money under the Instant Money Transfer Scheme at the instance of sixth accused through Manjeri Co-operative Urban Bank Limited, Evening Branch, Kondotty, all accused made a total pecuniary gain of `. 3,56,165/-causing corresponding loss to the Manjeri Co-operative Urban Bank Limited by short collection of bank's commission, the Reserve Bank of India imposed a fine of `. 5,00,000/- on the Manjeri Co-operative Urban Bank Limited and the bank suffered a total loss of `.8,56,165/- and thereby A1 to A5, A7 and A8 amongst you committed the offence of criminal misconduct punishable Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act (49 of 1988) and within my cognizance."

Learned senior counsel who appeared for the petitioners has raised the following contentions to challenge the final report filed against them. (1) The petitioners are not public servants as defined under Section 2(c) of the Act since the Bank in which they are employed has not received any financial aid from the State Government or the Central Government. (2) Sanction for prosecution granted under Section 19(1) of the Act against the accused in the case is invalid for the reason that it was granted without application of mind by the competent authority and mechanically on the basis of the model sanction order which was forwarded by the investigating officer to the Director Board of the Bank. (3) Even if the entire documents and other materials produced by the prosecution are accepted as true, the offences alleged against the petitioners would not be made out against them.

The first accused had filed Crl.R.P.No.797/2016 before this Court challenging the order passed by the Special Court by which it dismissed the application for discharge filed by him. The aforesaid revision petition was dismissed by this Court by order dated 24.06.2016. Therefore, the present revision petition filed by the first accused, challenging the charge framed against him by the trial court, is not maintainable and it is liable to be dismissed for that reason alone.

In Crl.R.P.No.797/2016, the first accused had raised the contention that he was not a public servant as defined under Section 2(c) of the Act. The aforesaid contention was negatived by this Court in the order dated 24.06.2016, by stating as follows:

"7. As per Section 2(c)(ix) of the P.C.Act, any person, who is the President, Secretary or other office-bearer of a registered Co-Operative Society engaged in agriculture, industry, trade or banking, receiving or having received any financial aid from the Central Government or State Government, as the case may be, is a "Public Servant". Admittedly, the said Co-operative Urban Bank, wherein the petitioners were employed, is engaged in banking business. Therefore, it is a co-operative society engaged in banking business.

The next question to be decided is whether the said co-operative society had ever received or has been receiving any financial aid from the Central Government or the State Government or any Corporation or Company owned by the State Government or Central Government. That question is purely a question of fact to be decided through evidence. The stage of Section 239 Cr.P.C is too premature to consider that question. If the prosecution is able to show that the said co-operative society had ever received any financial aid or has been receiving any financial aid as aforesaid, definitely the petitioners would come within the definition of 'Public Servants" within the meaning of 2(c) (ix) of the P.C.Act".

In view of the above finding against the first accused made by this Court in the order dated 24.06.2016 in Crl.R.P.No.797/2016, he cannot re-agitate that issue before this Court.

As per the definition given in Section 2(c)(iii) of the Act, "public servant" includes any person in the service or pay of a corporation established by or under a Central, Provincial or State Act, or an authority or a body owned or controlled or aided by the Government or a Government company as defined in section 617 of the Companies Act, 1956.

In construing the definition of 'public servant' in Clause (c) of Section 2 of the Act, the court is required to adopt a purposive approach as would give effect to the intention of the legislature. When the legislature has used a comprehensive definition of 'public servant' to achieve the purpose of punishing and curbing growing corruption in government and semi-government departments, it would be appropriate not to limit the contents of definition clause by a construction which would be against the spirit of the statute. The definition of 'public servant', therefore, deserves a wide construction (See Government of A.P v. P. Venku Reddy : AIR 2002 SC 3346 and Manish Trivedi v. State of Rajasthan : AIR 2014 SC 648).

In  State  of  Gujarat  v.  Mansukhbhai  Kanjibhai Shah: AIR 2020 SC 2203: 2020 SCC OnLine SC 412, the Apex Court has held as follows:

"On a perusal of Section 2(c) of the PC Act, we may observe that the emphasis is not on the position held by an individual, rather, it is on the public duty performed by him/her. In this regard, the legislative intention was to not provide an exhaustive list of authorities which are covered, rather a general definition of 'public servant' is provided thereunder".

Employees or servants of a co-operative society, which is controlled or aided by the government, are covered by sub-clause (iii) of clause (c) of Section 2 of the Act (See Government of A.P v. P. Venku Reddy : AIR 2002 SC 3346 and CBI v. P.G.Jain : (2016) 12 SCC 360).

Admittedly, the petitioners were employees of a Co-operative Society doing banking business. Then, the question whether the Society or Bank had received any financial aid from the State or the Central Government is a matter of evidence. The position of law in this regard stands crystalized by the decision of the Supreme Court in State of Maharashtra v. Brijlal Sadasukh Modani : AIR 2016 SC 1377, in which it has been held as follows:

"In our considered opinion, even any grant or any aid at the time of establishment of the society or in any construction or in any structural concept or any aspect would be an aid. We are inclined to think so as the term 'aid' has not been defined. A sprinkle of aid to the society will also bring an employee within the definition of 'public servant'. The concept in entirety has to be understood in the backdrop of corruption".

(emphasis supplied)

The Apex Court proceeded further and held as follows:

"Therefore, we are of the convinced opinion that it was entirely unnecessary on the part of the High Court to enter into elaborate deliberation to arrive at the conclusion that the respondent was not a public servant. Regard being had to the facts of the case, we think it would be apposite that it is left to be dealt with in the course of trial whether the society concerned has ever been granted any kind of aid or not".

(emphasis supplied)

In the light of the decision of the Apex Court in Brijlal (supra),  the  contention  of  the  learned  senior  counsel  for  the petitioners that the Bank has not received any financial aid from the State Government and therefore, the employees of the Bank do not come within the purview of the definition of public servant under Section  2(c)(iii) of the Act cannot be examined in detail at this stage. It is a matter to be dealt with in the course of the trial of the case.

The next contention raised by the learned senior counsel is with regard to the validity of the sanction for prosecution granted against the accused under Section 19(1) of the Act. Admittedly, the Board of Directors of the Bank has granted sanction for prosecution against the petitioners under Section 19(1) of the Act. The petitioners have no case that the Director Board of the Bank is not the authority competent to grant sanction for prosecution against them under Section 19(1) of the Act. When the sanction for prosecution is admittedly granted by an authority competent to grant it, the validity of the sanction granted is a question to be decided not at the stage of framing the charge against the accused. It is a matter to be considered and decided by the trial court after adducing evidence in the case.

There is a distinction between the absence of sanction and invalidity on account of non-application of mind. The former question can be agitated at the threshold but the latter is a question which has to be raised during trial (See Parkash Singh Badal v. State of Punjab : AIR 2007 SC 1274).

Section 19(3) of the Act makes it clear that no finding, sentence or order passed by a Special Judge shall be reversed or altered by a court in appeal or revision on the ground of absence of/ or any error, omission or irregularity in sanction required under sub-section (1) of Section 19 unless in the opinion of the Court a failure of justice has in fact been occasioned thereby. The stage when this failure is to be established is not the stage of framing of charge but once the trial commenced and evidence is adduced (See State of M.P v. Virender Kumar Tripathi : (2009) 15 SCC 533).

Therefore, the validity of sanction for prosecution granted by the competent authority under Section 19(1) of the Act is not a matter to be raised in challenging the charge framed against the accused by the trial court. The challenge would have been maintainable if it is a case of total absence of sanction by a competent authority.

The question whether the materials produced by the prosecution would make out the offences alleged against the petitioners shall be considered now.

Accused No.1 (Crl.R.P.No.672/2019)

The question whether the materials produced by the prosecution are sufficient to make out a prima facie case against the first accused does not merit consideration in the present revision petition filed by him. He had already filed a revision petition challenging the order passed by the Special Court by which it dismissed the application for discharge filed by him. The aforesaid revision petition was dismissed by this Court. Whatever contentions, on the question of framing charge against him, should have been raised by the first accused in the revision petition which was filed by him earlier. He cannot be permitted to raise questions or contentions in piecemeal with regard to framing of charge by filing revision petitions one after another.

Even otherwise, the statement filed by the investigating officer indicates that there are materials to show that it was the first accused who introduced the sixth accused in the Bank and assisted the sixth accused to open real and bogus accounts in the Bank through which the money was collected subsequently. Prima facie, it is sufficient to indicate the involvement of the first accused, who was the Senior Clerk in the Bank, in the criminal conspiracy allegedly hatched to allow the sixth accused to obtain undue pecuniary advantage.

The discussion above leads to the conclusion that the revision petition filed by the first accused is liable to be dismissed. Accused No.7 (Crl.R.P.No.725 of 2019):

As already noticed, the seventh accused had filed an application (Crl.M.P.No.609/2014) for discharge under Section 239 of the Code before the trial court. The aforesaid application was dismissed by the Special Court by order dated 21.01.2016.

The seventh accused did not challenge the order of the Special Court dismissing the application for discharge filed by him and that order has become final. It was after the dismissal of the application for discharge filed by him that the court framed charge against him. Since he did not challenge the order of the Special Court dismissing the application for discharge filed by him, he cannot now raise a contention that framing of charge against him by the trial court is illegal exercise of jurisdiction by that court.

If the Special Court had not taken into consideration the plea of the seventh accused that there are no materials produced by the prosecution which would make out a prima facie case against him, he should have challenged that order.

Learned senior counsel contended that the seventh accused was a person working at the Head Office of the Bank at Manjeri and he had no role in the money transactions conducted in the Kondotty Evening Branch of the Bank.

Regarding the role of the seventh accused in the case, it is mentioned in the statement filed by the investigating officer as follows:

"The Bank account ledger maintained at the Head Office pertaining to MCUB's account with Centurion Bank is prepared by the Asst.Secretary (A7) after cross checking and verifying the Head office advice with the credit vouchers and head office statements. Since the amount sent was split up and credited into several accounts, credit vouchers and head office statements were contradictory to each other. When the discrepancies were noticed by the concerned section staff at the Head office, it was reported to the Asst.Secretary but he deliberately suppressed it and took no action."

It is also mentioned in the statement filed by the investigating officer that there are materials to show that it was the seventh accused, along with the first accused, who introduced the sixth accused at the Head Office of the Bank at Manjeri.

Learned senior counsel has not raised any contention that the prosecution has not produced any material before the trial court to substantiate the aforesaid allegations against the seventh accused.

Inspite of the fact that the discrepancies with regard to the money transactions conducted in the Kondotty Evening Branch were brought to the notice of the seventh accused by the section staff at the Head Office, if he had not taken any action in that regard, it would prima facie indicate his involvement in the conspiracy allegedly hatched by the accused to allow the sixth accused to gain undue pecuniary advantage.

In order to frame charge against the accused, a strong suspicion is sufficient. A microscopic examination of the materials produced by the prosecution is not warranted at that stage. The evaluation of the materials produced by the prosecution shall be conducted by the court only for the limited purpose of finding out whether any prima facie case is made out against the accused.

In the aforesaid circumstances, especially in the absence of any challenge made by the seventh accused against the order passed by the Special Court dismissing the application for discharge filed by him, I am not inclined to exercise the revisional jurisdiction of this Court to set aside the charge framed against him by the trial court.

Accused No.3 (Crl.M.C.No.5286/2018)

In the additional statement dated 04.02.2019 filed by the investigating officer, with regard to the role of the third accused in the transaction, it is mentioned as follows:

"1st petitioner Sri.C.M.Shabeer was the Junior Clerk at MCUB, Kondotty evening branch during the period from 15-12-1999 to 02-05-2003. He is accused no.3 in the Vigilance Case. He was in-charge of preparing credit slips. The credit slips were to be prepared according to the instructions in the Head Office advice. Whilst the Head office advice for every transaction was to credit the whole amount to the Current Account of Mohammed Asharaf (A6), he divided the amount into smaller portions, prepared multiple credit slips in the names of other accounts and credited the amounts so split up to various accounts upon the direction of A1 and A2. He also prepared the credit slip vouchers without entering the commission amount due to the bank. Hence he was instrumental in causing loss to the Bank and corresponding gain to Mohammed Asharaf (A6)."

Learned Public Prosecutor has not pointed out the materials which have been produced by the prosecution in the Special Court along with the final report to substantiate the above allegations against the third accused.

The charge framed against the accused by the Special Court also does not contain any such allegation against the third accused as mentioned above.

The summary of the allegations against the accused stated in the final report also does not contain any allegation as above against the third accused.

In the above circumstances, it is for the trial court to verify and ascertain whether the prosecution has produced any materials before that court along with the final report to substantiate the above allegations against the third accused and whether the facts emerging from such materials would prima facie make out the offences alleged against him. The matter has to be remitted to the trial court for that purpose.

Accused No.8 (Crl.M.C.No.5286/2018)

In the additional statement dated 04.02.2019 filed by the investigating officer, regarding the role of the eighth accused, it is mentioned as follows:

"Sri.R.V.Sunil Kumar, the 2nd  petitioner herein and 8th  accused in the Vigilance case, was the Junior Clerk who handled the SB account and Current Account ledgers during the period from 22.10.97 to 02.05.2001. He posted entries in the Ledgers by crediting funds in accounts without any sort of authorization and against the Head office advice."

Learned Public Prosecutor has not pointed out the materials which have been produced by the prosecution along with the final report to prove the aforesaid allegations against the eighth accused.

The charge framed against the accused by the Special Court also does not contain any such allegations as against the eighth accused.

The summary of the allegations against the accused stated in the final report also does not contain any allegation as above against the eighth accused.

In the above circumstances, it is for the trial court to verify and ascertain whether the prosecution has produced any materials before that court along with the final report to substantiate the above allegations against the eighth accused and whether the facts emerging from such materials would prima facie make out the offences alleged against him.

The discussion above leads to the conclusion that the revision petitions filed by the first and the seventh accused are liable to be dismissed. The petition Crl.M.C.No.5286/2018 filed by the third and the eighth accused has to be allowed and the charge framed against the aforesaid accused is liable to be set aside.

Consequently, Crl.R.P.No.692/2019 and Crl.R.P.No. 725/2019 are dismissed. Crl.M.C.No.5286/2018 is allowed in part. The charge framed by the trial court, as far as it relates to the third and the eighth accused, is set aside. The learned Special Judge shall consider afresh the question of framing charge against the third and the eighth accused and proceed with the case in accordance with law.