N.R. Bhat and Others vs State

A.V. Chandrashekara, J.—Since both the criminal appeals filed under Section 374(2) of Cr.P.C. have arisen out of the judgment of conviction and sentence passed by the learned XXI Additional City Civil and Sessions Judge, Bengaluru, in Spl. C.C. 150/95, they are taken up together for common discussion.

Appellant in Crl.A.2190/06 was accused No. 1 and appellant in the connected appeal, Crl.A.2185/06 was accused No. 2 in the said special case Spl. C.C. 150/95. Both of them had faced a trial for offences punishable under Sections 120B, 409, 467, 471, 477A, I.P.C. and Sections 13(2) read with Section 13(1)(c) and 13(1)(d) of the Prevention of Corruption Act (hereinafter referred to as the Act, for brevity). Both of them have been convicted and sentenced to undergo imprisonment and also to pay fine vide considered judgment dated 29.9.2006, the operative portion of which is reproduced below:

"Accused No. 1 is herby convicted under Section 248(2) Cr.P.C. of the offence punishable under Section 409, I.P.C. and he is directed to undergo rigorous imprisonment for a period of 5 years and also to pay fine of Rs. 25,000/-, in default to undergo simple imprisonment for a period of 6 months. He is further convicted under Section 248(2), Cr.P.C. for the offence punishable under Section 120B, I.P.C. and directed to undergo imprisonment for a period of 1 year and also to pay a fine of Rs. 5,000/-, in default to undergo simple imprisonment for 3 months.

He is further convicted under Section 248(2), Cr.P.C. for the offence punishable under Section 13(1)(c) read with Section 13(2) of Prevention of Corruption Act, 1988, and sentenced to undergo rigorous imprisonment for a period of 2 years and also to pay fine of Rs. 1,000/-, in default to undergo simple imprisonment for a period of one month. He is further convicted under Section 248(2), Cr.P.C. for the offences punishable under Sections 467, 471, 477A of the Indian Penal Code and he is directed to undergo rigorous imprisonment for a period of 1 year each and also to pay fine of Rs. 1,000/- for each of the said offences, in default to undergo simple imprisonment for a period of one month each respectively.

Accused No. 2 Venkataramani is hereby convicted under Section 248(2), of the offence punishable under Section 409, I.P.C. and he is directed to undergo simple imprisonment for a period of 4 years and also to pay fine of Rs. 10,000/-, in default to undergo simple imprisonment for a period of 6 months. He is further convicted under Section 120B, I.P.C. and is directed to undergo rigorous imprisonment for a period of 6 months and also to pay a fine of Rs. 5,000/-, in default to undergo simple imprisonment for 3 months. He is also convicted of the offence punishable under Section 13(1)(c) read with Section 13(2) of Prevention of Corruption Act, 1988, and sentenced to undergo rigorous imprisonment for a period of 1 year and also to pay fine of Rs. 4,000/-, in default to undergo simple imprisonment for a period of one month. He is further convicted under Section 248(2), Cr.P.C. for the offences punishable under Sections 467, 471, 477A of the Indian Penal Code and he is directed to undergo rigorous imprisonment for a period of 1 year for each of the offence and to pay fine of Rs. 1,000/- for each of the said offence, in default to undergo simple imprisonment for a period of one month each.

The sentences for all offences shall run concurrently.

The period of detention undergone by either of the accused during the period of investigation, if any, shall be given set off."

It is this judgment of conviction and sentence which is called in question by both the accused before this court by filing separate appeals.

Several grounds have been raised in both these appeals. Facts leading to the registration of case and consequent trial in the special court dealing with cases of CBI are as follows:

''A-1 N.R. Bhat while functioning as a Public Servant in the capacity as Manager of Syndicate Bank, BWSSB Branch, Bangalore during the period April 1990 to April 1992, entered into a criminal conspiracy with A-2 G. Venkatramani, who was Loans Officer in the said branch, in order to cause wrongful loss to Syndicate Bank and corresponding wrongful gain to themselves and in pursuance of the same, they fraudulently and dishonestly misappropriated/converted to their own use property under their control, by corrupt or illegal means or by otherwise abusing their official position, and thereby committed criminal misconduct. The accused forged signatures of customers of the bank on bank documents in order to avail against their deposits by fraudulent means, and used these documents as genuine knowing full that these documents were forged. Further they falsified books of accounts of the bank will to defraud the bank.

xxxx

On 2.1.91, the accused persons in pursuance of the conspiracy between them, fraudulently availed a loan of Rs. 3.75 lakhs against the fixed deposits of a customer Dr. K. Srinivasan. A-1 N.R. Bhat forged the signature of the customer Dr. K. Srinivasan on a loan document viz., debit slip cum stamped receipt. A-1 and A-2 authorised payment of cash against the loan document in order to avail the loan of Rs. 3.75 lakhs fraudulently. A-2 falsely certified having marked the bank''s lien on the customer''s deposit receipts as well as on deposit ledger of the branch."

Separate charges came to be framed against the accused on 31.10.1998 insofar as it relates to the alleged availment of loan on the fixed deposits of Dr. K. Srinivasan. Both of them had denied the charges leveled against them and they wanted the court to hold a trial. Of course, charges also came to be framed against both these accused relating to the availment of loan on fixed deposits of another customer, Smt. Urmila in the same case. Of course both these accused have been acquitted of all the charges leveled against them insofar the alleged availment of loan on the fixed deposits of Smt. Urmila in the same judgment pronounced in Spl. C.C.150/95.

In order to bring home the guilt of the accused in respect of both the cases relating to Dr. K. Srinivasan and Smt. Urmila, prosecution has examined in all 26 witnesses. As many as 104 exhibits have been got marked on behalf of the prosecution. Both the accused have been examined under Section 313, Cr.P.C. Their case is one of total denial of all the allegations leveled against them. The defence set up on their behalf is that the fixed deposit holder, Dr. K. Srinivasan had availed loan on the strength of fixed deposits held by him and they were produced to the bank at the time of availing the loan. Two witnesses have been examined on behalf of the accused. Six exhibits have been got marked on their behalf.

The learned special judge has framed the following nine points for consideration:

"1) Whether sanction obtained by the investigating officer in this case is bad in law and thereby cognizance taken is improper?

2) Whether investigation done in this case is bad in law, in view of the provisions of Section 17 of the P.C. Act?

3) Whether the prosecution proves beyond reasonable doubt that the accused had criminally conspired to commit the offence of forgery, criminal breach of trust, using forged documents as genuine, falsification of accounts and the offences of criminal misconduct?

4) Whether the prosecution proves beyond reasonable doubt that the accused have committed offences of criminal breach of trust within the meaning of Section 409, I.P.C., in furtherance of their criminal conspiracy?

5) Whether the prosecution proves beyond reasonable doubt that the accused have committed offences of forgery within the meaning of Section 463, I.P.C. in furtherance of their criminal conspiracy?

6) Whether the prosecution proves beyond reasonable doubt that the accused have used the documents containing forged signature of customer and other forged documents as genuine, in furtherance of their criminal conspiracy?

7) Whether the prosecution proves beyond reasonable doubt that the accused have committed offences of falsification of the books of accounts of the bank to defraud Syndicate bank in furtherance of their criminal conspiracy?

8) Whether the prosecution proves beyond reasonable doubt that the accused have committed the offences of criminal misconduct within the meaning of Prevention of Corruption Act?

9) What order?"

Learned senior counsel, Mr. P.S. Rajagopal appearing for accused No. 1 and Mr. Kiran S. Javali and Sri H.N. Venkatesh for accused No. 2 have submitted their arguments at length. Sri C.H. Jadhav, senior counsel representing C.B.I. has also submitted his arguments at length.

The learned judge has held point Nos. 1 and 2 in the negative and remaining points in the affirmative, and has ultimately convicted both the accused for all the offences for which they had been charged earlier. Several grounds have been raised in both the appeals challenging the finding given by the trial court.

Learned senior counsel, Sri P.S. Rajagopal has vehemently argued that Mr. S.K. Vijaya Rajiv who conducted the entire investigation in the present case was incompetent to conduct investigation in terms of Section 17 of the Act. He has further argued that the learned first additional Chief Metropolitan Magistrate who permitted Mr. S.K. Vijaya Rajiv could not have authorized Mr. S.K. Vijaya Rajiv to conduct investigation and the said authorization was without application of mind. Hence the same had been brought to the notice of the trial court before the commencement of the trial and the objection was negatived vide detailed order dated 16.4.1999. It is submitted that the said order dated 16.4.1999 passed by the trial court had been challenged before this court and permission has been granted by this court to decide the issue regarding incompetence of the I.O., while deciding the case on merits after holding a full-fledged trial. Several decisions have been relied upon by the learned senior counsel Mr. P.S. Rajagopal and Mr. Krisan Javali as well as learned senior counsel, Mr. C.H. Jadhav representing C.B.I.

It is argued with force by the learned counsel appearing for the appellants that as a result of incompetent officer conducting investigation, substantial prejudice has been caused to both the accused and have pointed several instances of prejudice caused to the appellants-accused. The gist of the arguments advanced by both the counsel for the accused is that investigation was unfair and carried out with a motive. It is further argued that the I.O. is not expected to bolster up a prosecution case with such evidence as may enable the court to record conviction, but to bring out the real and unvarnished truth.

Per contra, learned counsel, Sri C.H. Jadhav has argued that the Superintendent of Police, CBI, had placed all the materials before the learned ACMM while seeking permission to authorize Mr. S.K. Vijaya Rajiv, Police Sub Inspector of CBI to conduct investigation. It is argued that the prosecutor had moved the said application before the Additional Chief Metropolitan Magistrate (ACMM, for short) and only after satisfying about the contents of the application, permission was accorded and the same cannot be found fault with.

Both the learned counsel appearing for the appellants have vehemently argued that the Trial Court has convicted the accused on the basis of surmises and conjectures and that the prosecution has not proved the guilt of the accused beyond all reasonable doubt and that the depositions of material witnesses have not been properly analyzed and that certain incriminating evidence, though not put to the accused under Section 313, Cr.P.C. have been taken into consideration. It is further argued that there is absolutely no evidence in regard to the theory of conspiracy. The genesis of the prosecution case, according to the learned counsel for the appellants, is suppressed and in this regard they have relied upon the evidence of PW1, clerk dealing with the Loan Section. It is argued that material document like the preliminary report said to have been submitted by PW18-Shivaraman has been withheld and there are glaring inconsistencies and variations in the evidence of the witnesses inter se. It is argued that Ex. D1 got marked on behalf of the accused has been misinterpreted to take a negative view against the accused.

Per contra Mr. C.H. Jadhav has argued that the case of the prosecution is otherwise acceptable in spite of few inconsistencies found here and there and those inconsistencies are minor in nature. It is argued that the accused have failed to probablise their defence. It is argued that investigation is not the solitary area for judicial scrutiny in a criminal trial and that the accused, being the custodians of documents and conversant with the procedures of daily banking, have failed to explain their stand satisfactorily.

It is argued that bankers need to discharge their duties honestly and that even if some evidence is improperly obtained, the same cannot be considered as inadmissible, unless serious prejudice caused to the accused is made out. He has argued that initial burden cast upon the accused is effectively discharged and the onus has not been explained by the accused. He has further argued that the Trial Court has rightly analyzed the evidence of handwriting expert in regard to the signature of PW-10 found on the debit slip marked as Ex. P-1. It is his submission that the totality of the case is to be looked into keeping in mind the dominant position they had in the bank at that point of time.

After hearing the arguments and perusing the records, the following points arise for consideration of this Court:

"1) Whether the order of ACMM, Bangalore authorizing PSI Mr. S.K. Vijaya Rajiv of CBI to investigate the case is illegal or improper and contrary to Section 7 of P.C. Act, 1988.?

2) Whether the investigation conducted by the I.O. Mr. S.K. Vijaya Rajiv has caused serious prejudice to the accused in this case?

3) Whether the Trial Court is justified in convicting the accused for the offence of conspiracy, criminal breach of trust, forgery, falsification of accounts and misconduct?

4) Whether any interference is called for, if so to what extent?"

REASONS

Point No. (1): What is argued before this court by the learned counsel for the appellants is that Vijaya Rajiv, police officer who investigated the present case was below the rank of inspector and therefore he was not authorized to conduct investigation in terms of Section 17 of the P.C. Act. It is further argued that even otherwise, the authorization given by the magistrate authorizing Mr. Vijaya Rajiv to conduct investigation on the basis of a letter submitted by the Superintendent of Police does not indicate the application of mind by the learned I ACMM and the contents of the application is as bald as it could be. It is further argued that no material particulars are forthcoming in regard to the availability of police officers of the requisite rank and the reason as to why one of them could not be spared to investigate a case of this nature.

Section 17 of the P.C. Act is found ion Chapter IV and the same is extracted below:

"17. Persons authorised to investigate:

Notwithstanding anything contained in the Code of Criminal Procedure, 1973, no police officer below the rank,- (a) in the case of the Delhi Special Police Establishment, of an Inspector of Police; (b) in the metropolitan areas of Bombay, Calcutta, Madras and Ahmedabad and in any other metropolitan area notified as such under sub-section (1) of section 8 of the Code of Criminal Procedure, 1973, of an Assistant Commissioner of Police; (c) elsewhere, of a Deputy Superintendent of Police or a police officer of equivalent rank, shall investigate any offence punishable under this Act without the order of a Metropolitan Magistrate or a Magistrate of the first class, as the case may be, or make any arrest therefor without a warrant:

Provided that if a police officer not below the rank of an Inspector of Police is authorised by the State Government in this behalf by general or special order, he may also investigate any such offence without the order of a Metropolitan Magistrate or a Magistrate of the first class, as the case may be, or make arrest therefor without a warrant:

Provided further that an offence referred to in clause (e) of sub-section (1) of section 13 shall not be investigated without the older of a police officer not below the rank of a Superintendent of Police."

On a plain reading of this section, it is clear that a police officer of CBI below the rank of inspector can conduct investigation, provided an order is passed by the Magistrate or Magistrate First Class, as the case may be, and he can even make arrest of a person without warrant.

It is relevant to look into the application filed by Superintendent of Police, CBI, Bengaluru, on 9.6.1993 before the I Additional Magistrate which is marked as Ex. P95. The contents of Ex. P95 are as follows:

"APPLICATION FILED UNDER SECTION 17 OF PREVENTION OF CORRUPTION ACT 1988

It is respectfully submitted that based upon a source information a case in Cr. No. RC11(A)/93 U/S. 420, 409, 468, 471, 477A and 201 IPC 13(2) r/w 13(1) (d) of Prevention of Corruption Act 1988 was registered at this branch on 31.5.1993. The copy of the FIR. is enclosed herewith.

The brief facts of this case is that the accused while working at Syndicate Bank, B.W.S.S.B branch, Bangalore entered into a criminal conspiracy in order to cheat Syndicate Bank and in pursuance of the said conspiracy they raised loans to the tune of R. 19.25 lakhs against the fixed deposits of the customers of the branch by forging their signatures and misappropriated the same. Further they destroyed the records of the branch and falsified books of accounts in order to conceal their misdeeds.

The above case was registered by Shri. D.B. Desai, Deputy Superintendent of Police, CBI, SPE, Bangalore. Presently the said I.O. is investigating three other important cases. The Deputy Superintendents of Police/Inspectors of Police/Inspectors of Police, DSPE, Bangalore who are empowered to investigate offences under the P.C. Act 1988 are otherwise busy in the investigation of other cases like Security Scam case etc. Hence their services are not available for conducting investigation in this Case.

As head of the branch office of SPE, I have numerous duties, both Administrative and Executive. Besides, I have to be in constant touch with the Investigation done by the other Investigating Officers. Under these compelling circumstances, I intend to entrust the investigation of this case to Shri. S.K. Vijay Rajiv, Sub-Inspector of Police, SPE Division, Central Bureau of Investigation, Bangalore.

Prayer:

It is prayed that this Hon''ble Court may be pleased to invest Shri. S.K. Vijay Rajiv, Sub-Inspector of Police with necessary legal authority to conduct investigation into the facts of this case under the provisions of Sec. 17 of Prevention of Corruption Act 1988.

Sd/- (G.M.P. REDDY) Superintendent of Police, Central Bureau of Investigation, Bangalore."

What is argued before this court by Sri P.S. Rajagopal, learned senior counsel is that even the copy of FIR registered in RC. 11(A)/1993 was not made available to the I Additional Magistrate to go through it before passing the order of authorization. Therefore it is argued that the order passed by the magistrate on 10.6.1993 is without application of mind. The relevant portion of the order passed on the application under Section 17 of the Act vide Ex. P95 is as follows:

"Permitted as prayed. Sd/- I Addl. Magistrate 10.6.1993"

This portion is marked as Ex. P95(a).

It is true that copy of the FIR was not appended to Ex. P-95 when permission was sought from the magistrate, but a brief background of the registration of case in RC.11(A)/93 is made about the alleged conspiracy between the accused inter se and raising loans to the tune of Rs. 19.25 lakhs as against fixed deposits of customers of BWSSB Branch and forging their signature and misappropriating amounts on the basis of falsification of accounts. It is also mentioned that the Dy. Superintendent of Police, CBI, Mr. D.V. Desai was also engaged in investigating other cases and therefore the Dy. Superintendent of Police was otherwise busy investigating other matters like security scam case, etc. It is also forthcoming from Ex. P-95 that their services were not available for conducting investigation in the present case. He has enumerated reasons as to why he was not personally able to conduct the investigation. He has mentioned that he had enormous duties both on the administrative side as well as executive side and has to be in constant touch with various cases relating to investigation by CBI, Bengaluru. Therefore permission was sought to hand over investigation to Vijay Rajiv, Police Sub Inspector, CBI, Bengaluru.

What is argued before this court by the learned counsel, Mr. P.S. Rajagopal is that reasons should have been assigned by the magistrate before granting permission and the very fact that the order does not disclose the reasons would amount to non-application of mind. On a plain reading of the contents of Ex. P95, this court is of the opinion that requisite details were made available by the Superintendent of Police, Mr. G.M.P. Reddy to the magistrate before seeking authorization.

Mr. S.K. Vijaya Rajiv had been cited as CW-39 and is examined as PW-26. He has deposed that he was working in CBI during 1991-93 and on promotion he worked as Inspector from November 1993 and has continued to be Inspector in CBI. During the course of his cross-examination, nothing is imputed to PW-26 about his incapacity or incompetence to investigate a case of this nature. Admittedly the case on hand is not a case relating to acquisition of assets disproportionate to the known sources of income which requires elaborate investigation. The case on hand relates to the alleged raising of loans by the accused on the basis of fixed deposits of customers of BWSSB Branch by falsification of accounts and forging signatures.

Normally a Police Sub Inspector, being the Station House Officer, would be conversant with the manner in which a case of this nature has to be investigated.

The Hon''ble apex court in a case reported in STATE BY INSPECTOR OF POLICE, VISAKHAPATNAM v. SURYASHANKAR KARVI has held that the statutory functionary must act in the manner laid down in the statute and that issuance of oral direction is not contemplated under the Act, more particularly when the concept is unknown in administrative law. As per the facts of the said case, no written order had been passed authorizing the police officer to conduct investigation in terms of Section 17, P.C. Act.

In the present case, a detailed application was submitted by the Superintendent of Police, CBI, through the concerned prosecutor seeking permission to entrust the case to be investigated by Mr. Vijaya Rajiv. If the contents of the application vide Ex. P-95 were not clear and the magistrate had passed an order ''permitted'', it would have been something different. Non-mentioning of the words ''satisfied as to the contents of the application filed by the Superintendent of Police'' would not make the authorization given by the I Additional Magistrate otiose. Therefore the said decision rendered in the case of STATE BY INSPECTOR OF POLICE, VISAKHAPATNAM v. SURYASHANKAR KARVI (supra) is not helpful to the prosecution case and on the other hand, it is clearly distinguishable on facts.

In the case of UNION OF INDIA ETC. REPRESENTED THROUGH SUPERINTENDNENT OF POLICE v. T. NATHAMUNI, an appeal arising out of SLP (Crl.)2521-2522/ 14, the Hon''ble apex court has held that ''an accused is expected to make out a specific case that by reason of investigation conducted by an officer below the rank specified in Section 17 of the P.C. Act, has caused serious prejudice and thereby miscarriage of justice has been caused.'' What is further reiterated in paragraph 13 of the said case is that invalidity of investigation does not vitiate trial unless miscarriage of justice has been caused. The decisions of the Hon''ble apex court rendered in the following cases have been considered in the said case:

"1) M.C. Sulkunte Vs. State of Mysore, AIR 1971 SC 508 : (1971) CriLJ 519 : (1970) 3 SCC 513 : (1971) SCC(Cri) 119 : (1971) 3 UJ 83

2) Muni Lal Vs. Delhi Administration, AIR 1971 SC 1525 : (1971) CriLJ 1153 : (1971) 2 SCC 48 : (1971) SCC(Cri) 407 : (1971) SCR 276 Supp ,

3) State of Haryana and others Vs. Ch. Bhajan Lal and others, AIR 1992 SC 604 : (1992) CriLJ 527 : (1990) 4 JT 650 : (1990) 2 SCALE 1066 : (1992) 1 SCC 335 Supp : (1990) 3 SCR 259 Supp and

4) A.C. Sharma Vs. Delhi Administration, AIR 1973 SC 913 : (1973) CriLJ 902 : (1973) 1 SCC 726 : (1973) SCC(Cri) 608 : (1973) 3 SCR 477 "

In the case of A.C. SHARMA v. DELHI ADMINISTRATION, the Hon''ble apex court, while discussing the provisions of Section 5A of the Repealed Prevention of Corruption Act, 1947, has held that even illegality in the course of collection of evidence can scarcely be considered by itself to affect legality of the trial by an otherwise competent court of the offence so investigated. Relying upon its earlier decision rendered in the case of H. N. RISHBUD AND INDER SINGH v. THE STATE OF DELHI, it is reiterated that the illegality committed in the course of investigation does not affect the competence and jurisdiction of the court for trial.

As per the facts of the case in UNION OF INDIA THROUGH SUPERINTENDENT OF POLICE v. NNATHAMUNI (supra), the special inspector had conducted investigation and submitted charge sheet. It was after that, the said order was called in question by filing a criminal petition in the High Court. The learned single Judge, appreciating the submissions made by the learned counsel, had held that since the special court had permitted the sub inspector to investigate the matter without assigning any reason, the order was not in accordance with law. Therefore liberty was granted to the prosecution to file a fresh application to the court seeking permission to get the matter investigated by a competent officer. When the matter was taken up to the Hon''ble apex court, what is held is that, having regard to the fact that no case of prejudice or miscarriage of justice by reason of investigation by the police is made out, the order of the High Court cannot be sustained and therefore the appeals were allowed on 1.12.2014. Thus this court is of the opinion that the order of the I Additional Magistrate authorizing Mr. Vijaya Rajiv (PW-26) to investigate the case is neither illegal nor improper, and is in terms of Section 17, P.C. Act. Thus point No. (1) is answered in the negative.

Point No. (2): Learned senior counsel, Mr. P.S. Rajagopal has vehemently argued that serious prejudice has been caused to the 1st accused as a result of the investigation being perfunctory, partisan and unfair. Relying upon several circumstances to point out the alleged partisanship and unfairness in the investigation, he has contended that on 19.8.1993, the residence of the 1st accused was searched and this was absolutely not required. But the same cannot be found fault with since search is also a part of investigation that too authorized by the judge. In this regard on 26.8.1993, the IO claims to have written to the bank seeking documents. The statement of PW-18, Shivaraman who conducted preliminary investigation into the incident in question, was recorded on 4.9.1993. He has referred to the fixed deposits of another FD holder, Smt. Urmila.

According to the learned senior counsel, these fixed deposit receipts were forwarded to the IO only on 2.8.1993 under Ex. P100. In his evidence, PW-18, Shivaraman has deposed that he did not hand over any document to the IO in relation to this case; but the IO recorded his statement and the documents which were taken by PW-18 to BWSSB Branch were shown to him. This, according to the learned counsel, is quite contradictory.

The statement of Dr. K. Srinivasan was recorded on 9.3.1994 in which he has referred to the Fixed Deposit receipts bearing Nos. 3765 to 3784 and Ex. P1 to P20. As rightly pointed out by the learned senior counsel, these FD receipts were sent to the IO actually on 26.7.1994 by the vigilance section and therefore he could not have seen those receipts and the IO could not have shown it to him also. On 16.3.1994, the statement of Smt. Latha D. Mathe was recorded by the IO. She has been cited as CW-5 and is examined as PW3. She has deposed that the signatures of the customer, Dr. K. Srinivasan on the debit slip did not tally with the signature on the FD receipts. What is argued by the learned senior counsel is that when the FD receipts of Dr. Srinivasan were not with the IO, how could this witness have stated so? CW-12, Santosh Kumar to whom the FD receipts were allegedly confronted by the IO, has not been examined during trial.

What is argued before this court is that the statement of CW-4 is recorded by the IO in which there is mention about 20 FD receipts shown to him. His statement was recorded on 5.5.1994; but he received the receipts in question on 26.7.1994 from the Vigilance Section and there is no mention of Vijaya Cash Certificate worth Rs. 1,00,000/- which was also one of the securities for the very same loan. What is argued before this court by Mr. P.S. Rajagopal is that on 7.9.1994, 8 documents were sent by the bank vide Ex. P101 along with the manual of instructions in respect of loan and deposits, and the IO did not verify the manual and registers in full. It is argued that the loan granted to Dr. K. Srinivasan was on the security of 20 Fixed Deposits of Rs. 20,000/- each and one Vijaya Cash Certificate of Rs. 1,00,000/- i.e., VCC. But in the entire investigation, this cash certificate of Rs. 1,00,000/- was not secured and no mention of it is found. Therefore, it is argued that had Dr. Srinivasan not himself signed and offered the said Vijaya Cash Certificate as security for the loan, it would not have found place in Ex. P-21, debit slip. It is further argued that the preliminary investigation report submitted by PW-18, Shivaraman is destroyed. But his report submitted to the IO has not been produced before court. It is further argued that the seizure of documents and obtaining of specimen writings are contrary to stipulated procedures and do not inspire confidence.

It is further argued that the 1st accused handed over charge of the branch on 29.4.1992 and no discrepancy was found in the loan papers, and that his successor also did not file any discrepancy report and two months after the 1st accused left the scene, an internal investigation was done by PW-18, Shivaraman. It is argued that neither the successor of the 1st accused is examined nor the discrepancy report is produced. It is further argued that Ex. P3-, manual of instructions relates to the procedures to be adopted while raising loan on fixed deposit and preservation of documents and that the same has been virtually ignored. It is vehemently argued that splitting of cases of Dr. Srinivasan and Chandrashekar of M/s. Deepam International has caused great prejudice. It is further argued before this court that in order to close the loan of Dr. Srinivasan, accused Nos. 1 and 2 raised loan on the FD receipts of Chandrashekar of M/s. Deepam Silks International and therefore, the said case could not have been split.

Various instances of alleged perfunctory investigation pointed out by the learned senior counsel, Mr. P.S. Rajagopal could be considered while re-appreciating the evidence on record. If they are found to be established, they could be definitely taken into consideration as to whether any benefit of doubt could be given.

In the case of N.V. Subba Rao Vs. State, through Inspector of Police, CBI/SPE, Visakhapatnam, A.P., (2013) 115 CLT 1153 : (2013) CriLJ 953 : (2013) 1 Crimes 350 : (2013) 1 JCC 235 : (2012) 1 JCC 235 : (2012) 12 JT 245 : (2013) 1 RCR(Criminal) 606 : (2012) 11 SCALE 614 : (2013) 2 SCC 162 , the Hon''ble Supreme Court has held that ''irregularities or deficiencies in conducting investigation are not always fatal to the prosecution case and if they are of greater magnitude, they can be definitely considered while appreciating the evidence on record.'' If material evidence, according to the learned counsel representing the accused, is not examined, there will be opportunity to draw adverse inference under Section 114(g) of the Evidence Act. If the Sub Inspector did not seize or produce certain documents, and if the very seizure of documents is highly prejudicial to the interest of the accused, such circumstances would come to the help of the accused to probablize his innocence.

As pointed out by the learned senior counsel representing CBI, if the IO has conducted improper investigation, the accused can take benefit of the same and seek acquittal. Thus serious anomalies pointed out by the learned senior counsel, Mr. Rajagopal would be definitely considered while re-appreciating the evidence pertaining to point No. 3) raised by this court.

Since the offences were in different years, the case of Chandrashekar was split up and separate trial was conducted. Since the allegations relating to Dr. K. Srinivasan and Smt. Urmila pertain to the same year, they were taken up together for common trial. Thus viewed from any angle, this court is unable to accept the contention of the learned counsel to the effect that serious prejudice has been caused to the accused as a result of which there has been miscarriage of justice. Accordingly point No. (2) is answered in the negative.

Point No. (3): The allegation against the 1st accused as found in the charge sheet and reiterated in the charges leveled against him is that, while functioning as manager of Syndicate Bank, BWSSB Branch during the period April 1990 to April 1992, he had entered into a criminal conspiracy with accused No. 2-G. Venkatramani, who was Loans Officer in the said branch, in order to cause wrongful loss to Syndicate Bank and corresponding wrongful gain to themselves and in pursuance of the same, they fraudulently and dishonestly misappropriated/converted to their own use property under their control, by corrupt or illegal means or by otherwise abusing their official position, and thereby committed criminal misconduct. It is further alleged that they forged signatures of customers of the bank on bank documents in order to avail loan against their deposits by fraudulent means, and used these documents as genuine knowing full that these documents were forged. Further they falsified books of accounts of the bank to defraud the bank. It is further alleged that on 2.1.1991, the accused persons in pursuance of the conspiracy hatched, fraudulently availed a loan of Rs. 3.75 lakhs against the fixed deposits of a customer, Dr. K. Srinivasan. Accused No. 1-N.R. Bhat forged the signature of the customer Dr. K. Srinivasan on a loan document viz., debit slip cum stamped receipt. Accused No. 1 and accused No. 2 authorised payment of cash against the loan document in order to avail the loan of Rs. 3.75 lakhs fraudulently. Accused No. 2 falsely certified having marked the bank''s lien on the customer''s deposit receipts as well as on deposit ledger of the branch.

With the above allegations made against the accused, we will have to see as to whether the trial court has properly analyzed the oral and documentary evidence on record in the right perspective. The first appellate court is expected to re-assess the entire oral and documentary evidence on record. The learned trial judge has pointed out four circumstances to be established by the prosecution and they are as follows:

"a) That there exists convincing evidence to show that loan deposit account bearing No. 1/91 exist in the name of Dr. Srinivasan?

b) That the said loan amount was actually received by the accused though loan was in the name of Dr. Srinivasan?

c) That the documents relating to the said loan transaction are forged documents?

d) In view of requirement (a) to (c) referred above being satisfied, the acts of accused fall within various sections of Indian Penal Code and Prevention of Corruption Act 1988?"

The fact that Dr. K. Srinivasan was a customer of BWSSB Branch of Syndicate Bank and that he had 20 FD receipts of Rs. 20,000/- each and one VCC (Vijaya Cash Certificate), is not in dispute. Of course the said VCC for Rs. 1,00,000/- had not been issued by the bank in question. The trial court has relied on Ex. P-21, ledger sheet to hold that Dr. Srinivasan was a customer of the bank and had held fixed deposits to the tune of Rs. 5,00,000/-. In page 24 of the judgment, the learned judge has come to the conclusion that the loan transaction took place in the said branch in the name of Dr. K. Srinivasan even though certain important documents relating to execution of the said documents were not forthcoming. According to the learned trial judge, Ex. P1 is in accordance with the provisions of the Bankers Book Evidence Act and the genuineness of the same cannot be doubted as it is vouch-safed by PW-1, PW-17 and PW-18. What is further held in paragraph 25 at page 26 of the judgment is that the contents of Ex. P-21 would show that the loan of Rs. 3,75 lakhs was sanctioned and debited on 2.1.1991.

PW1 is Narendra Kamath who was working as a clerk in the loan division of BWSSB Branch of Syndicate Bank and he has identified Ex. P-22, debit slip pertaining to debit of Rs. 3.75 lakhs. In fact PW-1 has admitted that Ex. P-22 is in his handwriting and that accused No. 2 passed the said debit slip. He has identified the signature of 2nd accused at Ex. P-22(b). Narendra Kamath is a very important witness who has spoken about the manner in which loan would be raised on the strength of Fixed Deposits and the procedure to be adopted in preparing loan documents. Narendra Kamath has been cited as CW-3 and he is examined as PW-1. Admittedly he was working as a clerk in BWSSB Franch of Syndicate Bank from 1985 to 1992 and the 1st accused was working in the same branch as branch manager during the period 1989-91 and the 2nd accused-Venkataramani was the officer in the said branch from 1986 to 1992 and was in charge of loan section at the relevant point of time. PW1 has deposed in his examination-in-chief that he used to prepare documents in the branch and place it before accused No. 2 for signature. After the signatures, the documents used to come back to him. Of course he was acquainted with the handwriting and signature of both the accused persons.

In paragraph 2 of his deposition, PW1 has given graphic details about the procedure contemplated for raising a loan on the strength of FDRs. He has deposed that a party who intends to avail loan on the strength of fixed deposits has to submit an application in Format O.C.6/17 and the same has to be handed over to him along with fixed deposits. Then he would process the loan application and after processing, it would be placed before the 2nd accused. He has specifically admitted that a person making an application to avail loan has to enclose the original FD receipts on which loan would be raised, and the party was required to sign the application and also FD receipt. It is his case that before sending the application to the officer in charge, he would prepare a debit slip in Format O.G.28/74 and it would be affixed by a stamp. When the loan application along with the FD receipt would be submitted to him, he would prepare debit slip and process papers and would obtain the signatures of the party on the documents at appropriate places and then only the documents and the application would be placed before the concerned officer for checking and authorizing payment of the amount.

According to PW-1, after scrutinizing the papers, the concerned officer in charge of loans would affix his signature on the debit slip and also on the loan papers and put a seal as ''PAY CASH'' or would write in his own handwriting as PAY CASH.'' After sanction of loan, a loan account on the basis of Fixed Deposit would be opened and a noting of the lien in the bank would also be mentioned in the deposit ledger as well as FD receipt. It is his case that he would take specimen signatures of the party on the loan deposit register. According to PW-1, normally loans would not be sanctioned on deposits made in other branches and it would be in the discretion of the branch manager to sanction loan of this nature. Even when the loan would be sanctioned on the strength of FD of other branches, the same procedure as detailed by him above would be followed and later on, the branch would write to the other branch to mark lien on the corresponding FD ledger and FD receipt would be retained by the loan sanctioning branch. It is his case that after the receipt of confirmation of noting of lien from the other branch, the said fact would be mentioned in the concerned deposit ledger with the name of the branch and date of lien. It is his case that normally loan would not be sanctioned on the deposit of other branches since there would be risk of misusing FD receipts.

In fact, PW-1 has identified the 20 FD receipts each of the face value of Rs. 20,000/- which are marked as Exs. P-1 to P-20. Of course no lien is marked on these FD receipts, the total value of which is Rs. 4,00,000/-. He has specifically admitted that Ex. P-22 is the debit slip which contains his handwriting and accused No. 2-Venkataramani has passed it and it is counter signed by accused No. 1. The signature of 1st accused on the said document is identified as Ex. P-22(a) and that of the 2nd accused as Ex. P-22(b). In the last sentence of his examination-in-chief, PW-1 has deposed that Dr. Srinivasan had not come to their branch on that day.

PW-1 has been cross-examined at length by the learned counsel for the accused separately. If the entire contents of the examination-in-chief were to be read as a whole, it becomes clear that the mandatory procedures have to be followed in regard to the FD holder seeking loan on the strength of FD receipts. The FD holder has to submit the application along with FD receipts and the concerned clerk of the bank would obtain the signature of the FD holder for discharge of the receipts and then debit slip would be prepared. A stamp would also be affixed on the debit slip where the FD holder has to subscribe his signature and then all the papers would also be placed before the concerned officer of the loan section. If Dr. Srinivasan had not come to the branch on that day, it was expected of PW-1 to disclose as to who submitted the said application along with FD receipts and who subscribed his signature on the reverse of the receipts marked as Exs. P-1 to P-20. This assumes more significance in the light of PW-10 admitting his signatures found on the reverse of Exs. P1 to P-20, FDRs.

PW-1, in his further cross-examination has admitted that accused Nos. 1 and 2 did not put their signatures in his presence and he had no occasion to see their signatures earlier to that date. He has specifically admitted that the manual of instructions requires procedures to be followed relating to sanction of loan on the strength of FD receipts of their branch and also of other branches. He has feigned ignorance as to whether the said manual was shown to him by the IO at the time of recording his statement, or whether his attention was drawn to the said manual. He has admitted that he was working as a clerk in the Loan Department during the year 1991-92 in BWSSB Branch.

The statement of PW-1 was recorded on 9.3.1994. He has admitted that the documents were shown to him by the IO, whereas on 26.7.1994 the 20 FD receipts were sent by the Vigilance Section of the concerned branch to the IO through a letter marked as Ex. P-98. It is ununderstandable as to how Exs. P-1 to P-20 could be confronted to PW-1 whose statement was recorded long prior to the receipt of Exs. P-1 to P-20 by the I.O. He has admitted that he did not know anything as to whether Dr. Srinivasan had come to the branch at any point of time. If he had not seen Srinivasan, it is ununderstandable as to how he could identify his signatures. To a specific suggestion put to him, he has deposed that on 2.9.1991 he had not seen Dr. Srinivasan coming to BWSSB Branch because he (PW-1) had gone for lunch at 2.30 p.m. He has admitted that he is not in a position to say whether Dr. Srinivasan had come to their branch on that day. According to him, he had prepared only loan documents and not the FD receipts.

According to the very version of PW-1 as found in his examination-in-chief, unless the FD holder or any representative on his behalf appeared and submitted an application along with FD receipts, papers could not have been processed for raising loan, further the FD holder was expected to subscribe his signature on the reverse of the FD receipts regarding discharge and this is mandatory. If PW-1 could depose that Dr. Srinivasan had not come and he had not seen him, it was incumbent upon him to have deposed at least about the person who actually handed over the application and FD receipts with the signature of the FD holder. It is not his case that accused No. 1 or accused No. 2 had instructed to prepare loan documents without insisting for production of fixed deposits and the loan application. Nothing is deposed by him as to what happened to the loan application and VCC of Rs. 1,00,000/-.

Admittedly the signatures found on the reverse of Exs. P-1 to P-20 are that of Dr. Srinivasan. Therefore we will have to re-assess the evidence of PW-10, Dr. Srinivasan. PW-10 has deposed that he had a patient by name Akbar Pasha working in Syndicate bank and at his instance, he deposited Rs. 5,00,000/- in BWSSB Branch. This evidence is contrary to the documentary evidence since he had only deposited Rs. 4,00,000/- by way of 20 FD receipts of Rs. 20,000/- each. In Ex. P-22, debit slip, there is a reference of another deposit called VCC (Vijaya Cash Certificate) bearing No. 3416 of Gavipuram Branch. That certificate is not produced before the court. PW-18 (Shivaraman) and the IO are silent about the non-production of this VCC of Gavipuram Branch for Rs. 1,00,000/-. In Ex. P-22, there is a reference about availing Rs. 3,75 lakhs on 2.1.1991 and repaying the same on 20.4.1991 by way of cash of Rs. 3,88,511/- inclusive of interest.

If VCC No. 3416 for Rs. 1,00,000/- had not been submitted along with 20 FD receipts of Rs. 20,000/- each, loan to the extent of Rs. 3,75 lakhs would not have been sanctioned to Dr. Srinivasan, since maximum extent of loan could be granted was only 75% of the amount covered under FD receipts. Dr. Srinivasan has identified only Exs. P1 to P20 as also the signatures found on the reverse of these receipts, as Exs. P1 (a) to P20(a). It is his case that these signatures were made by him for renewal. But these FD receipts do not speak anything about renewal and therefore the signatures found on the reverse of these receipts, marked as P-1 to P-20 must have been made on the day when the loan application was presented.

It is the further case of PW-10 that he had invested Rs. 1,00,000/- during September 1990 in BWSSB Branch and he had been issued 5 VIKAS Certificates of Rs. 20,000/- each, and they are marked as Exs. P-35 to P-39. No explanation is forthcoming about VCC No. 3416 mentioned in Ex. P22-debit slip. On the other hand, 5 VIKAS Certificates bearing Nos. 3642-3646/3153-3156 pertaining to BWSSB Branch are produced. This discrepancy has not been explained or clarified by anybody inclusive of Dr. Srinivasan (PW-10) or Shivaraman (PW-18). Even on the reverse of the FD receipts, the signature of Dr. Srinivasan is found. He does not remember whether the signatures were for renewal or encashment. It is his assertion that no loan was obtained by him on the basis of Exs. P-35 to P-39 and Exs. P-1 to P-20. But he has not explained as to how the bank came into possession of Exs. P-1 to P-20 and Exs. P35 to P39. Though he has stated that Exs. P-1 to P-20 and Exs. P-35 to P-40 were with him till encashment, neither the IO nor Shivaraman have given any explanation about the custody of these documents with the bank. Therefore the genesis of the prosecution case appears to be highly doubtful.

PW-10, Dr. Srinivasan has been cross-examined at length. It is his case that Exs. P-1 to P-20 were originally obtained by him from Syndicate Bank, Malleswaram Branch at the instance of Akbar Pasha and they were transferred from Malleswaram Branch to BWSSB Branch. It is his case that he had no deposits in Gavipuram Branch. If that is so, the IO is expected to explain about the mentioning of VCC No. 3416 of Gavipuram Branch as security for the loan. In fact PW-10 has gone to the extent of stating that he did not have any deposit in Gavipuram Branch and he has denied having stated to the IO that he had some deposit in Gavipuram Branch. This contradiction is marked as Ex. P-20, in Section 161 of statement of Dr. Srinivasan and it is a material contradiction.

Some useful admissions are elicited form the mouth of PW-10 relating to the affinity he had with Akbar Pasha who is examined as PW-11. He has deposed that Akbar Pasha was persuading him and coaxing him to make some deposits in BWSSB Branch and therefore he went to BWSSB Branch along with Akbar Pasha and met accused nos. 1 and 2 in the said branch. He does not remember whether BWSSB Branch issued any receipts through pay order through Akbar Pasha. He has feigned ignorance that he has subscribed his signatures on FD receipts at Exs. P-1 to P-20. He does not remember whether he signed on the reverse of these receipts for having issued pay order in discharge of receipts. He has specifically admitted that some of the transactions were made by him personally and some through Akbar Pasha. Therefore, the possibility of PW11, Akbar Pasha also meddling with fixed deposit receipts cannot be ruled out.

It is the case of PW-10 that the IO showed him Exs. P-1 to P-20 and Exs. P-35 to P-39 while recording his statement and therefore he had seen his signatures on the receipts. This is highly unacceptable because these documents were sent vide Ex. P-98 on 26.7.1994 by the bank, and therefore Dr. Srinivasan could not have seen his signatures on the reverse of the FD receipts.

The learned judge of the trial court has mainly relied on the signatures marked at Ex. P22(d) on the reverse of Ex. P-22. Relying upon the report of the handwriting expert, the learned judge has come to the conclusion that it is forged. It is true that evidence of an expert will have to be assessed as that of any other evidence. In the hierarchy of expert''s evidence, the evidence of a handwriting expert is on the lower order. It is unlike the expert evidence of DNA or that of a fingerprint expert. This will have to be viewed in the light of the version of PW-1 who prepared the entire papers relating to the loan on the strength of VCC No. 3416 and Exs. P-1 to P-20. On confronting the signature at Ex. P-22(c) and (d), PW-10 has failed to identify as to which are his signatures.

In the cross-examination conducted on behalf of the 2nd accused, useful admissions have been elicited form the mouth of PW-10 and the same are found in paragraph 11. He has deposed that Akbar Pasha may have access to his deposits in BWSSB Branch as he was working in Syndicate Bank and he did not know his rank in the bank. He has further admitted that in order to help Akbar Pasha, he made the deposits. Therefore the possibility of either Dr. Srinivasan himself handing over the FD receipts to the concerned clerk and subscribing his signatures cannot be ruled out, or having subscribed his signatures and sending them through Akbar Pasha in view of the implicit faith he had in him, cannot be ruled out. Thus serious inconsistency is forthcoming in the evidence of PW-10 and they are not minor variations, as opined by the learned trial Judge. This approach of the trial court is absolutely incorrect and improper.

Akbar Pasha-PW-11 has deposed about the acquaintance he had with PW10-Dr.Srinivasan. In the year 1987, he was working in the Regional Inspectorate of Syndicate Bank and Mrs. Pant was the Regional Manager in the Vigilance Section and the 1st accused was the manager in BWSSB Branch. According to him, Mrs. Pant was telling him that the 1st accused required some deposits for the branch and informed him to help in this regard. Since Dr. Srinivasan was known to him, he requested him to deposit his money in BWSSB Branch and accordingly Dr. Srinivasan invested his money in Fixed Deposit at BWSSB Branch. He has deposed that so far as his knowledge is concerned, Dr. Srinivasan had not availed any loan on the basis of FD receipts, and he cannot say with certainty that Dr. Srinivasan had never availed any loan on the basis of FD receipts.

In his cross-examination, PW-11 has admitted that PW-10 (Dr. Srinivasan) had given him some FD receipts and he had handed over the same to Mrs. Pant through whom the receipts were transferred to the Branch. He had deposited some amount in BWSSB Branch. He has feigned ignorance as to whether any FD receipts were transferred to BWSSB Branch. He has further deposed that at his request, Dr. Srinivasan got transferred the FD receipts to BWSSB Branch. He has denied a suggestion put to him that all transactions of investment, renewal and withdrawal by PW-10, Dr. Srinivasan was made through him.

The evidence of PW-10 and PW-11 will have to be read as a whole and on a conjoint reading of the same, both of them have not spoken as to how BWSSB Branch came into possession of all the fixed deposits of PW-10. Prosecution has relied on the evidence of PW-1, Narendra Kamath to impress upon the fact that he was conversant with the signatures of accused Nos. 1 and 2 found on Ex. P22 and the endorsement made by the 2nd accused with the words ''PAY CASH.'' But it is to be seen that Ex. P22 was prepared by PW-1 and it bears his handwriting. As already discussed, he was responsible for preparing the loan papers and processing the same till it reached the 2nd accused who was the officer in charge of loans. If the entire examination-in-chief portion of PW-1 were to be read, it discloses that he could not have prepared Ex. P22 without an application being submitted by the FD holder along with the FD receipts and subscribing signatures on the reverse of Exs. P-1 to P-20 and VCC of Rs. 1,00,000/-. It is also his case that after the loan is raised, documents would come back to him. Nowhere he has stated that the documents did not come back to him.

PW-1 was the best person to say as to who presented the application along with FD receipts containing the signatures on the reverse of Exs. P-1 to P-20. It is not his case that accused Nos. 1 and 2 asked him to prepare the papers and they gave the FD receipts to him. But the learned judge has attached too much of significance to the evidence of PW-1. Even if it is accepted that PW-1 was conversant with the signature and handwriting of accused Nos. 1 and 2, it would be of no importance since accused Nos. 1 and 2 themselves have admitted their signatures found on Ex. P22 and without their signature, the bill would not be passed.

The learned judge has made a detailed discussion in paragraph 40 of the judgment relating to the evidence of PW-24, Amar Singh, handwriting expert and Ex. P92, report submitted by the handwriting expert. After examining the disputed signature of PW-10 found on Ex. P-22, debit slip with the admitted signatures, PW-24 in the report, has held that the admitted signature of Dr. Srinivasan found on the VIKAS PATRA did not tally with the signature found on Ex. P-22. Therefore the learned judge has held that the signature found on Ex. P-22 is not that of Dr. Srinivasan. Therefore the learned judge has drawn an inference that accused No. 1 should have put his signature as if it was that of Dr. Srinivasan. Drawing of an inference, without there being any acceptable evidence, is untenable.

Ex. D1 is the pay-in-slip dated 20.4.1991 for having credited Rs. 3,88,511/- to the loan account of Dr. Srinivasan. What is argued is that the signature found on Ex. D1 is not that of Dr. Srinivasan or his authorized representative and therefore it was the accused who paid the amount. It is further held that if the accused had not raised the loan, there was no necessity for him to have paid Rs. 3,88,511/- to the loan account of Dr. Srinivasan. It is to be seen that Ex. D1 was very much part of the documents produced by the prosecution and it had not been got marked by the prosecution. The accused got it marked by confronting the same to PW-6 and this document has been blown out of proportion by the learned judge. What is held is that the contents of Ex. D-1 are in the handwriting of the 1st accused-N.R. Bhat and he is the authorized signatory. The signature found on Ex. D-1 over the column ''Authorized Signatory'' is stated to be that of the 1st accused. The same has been compared with the signature found on Ex. P22(b) and his signature found on the debit-slip-Ex. P-22. It is ununderstandable as to how the contents of Ex. D-1 could be considered as in the handwriting of 1st accused-N.R. Bhat. PW24, Amar Singh has been cross-examined thoroughly in this respect.

PW-24 has relied on the report containing the reasons given by the questioned document examiner, Mr. D.D. Goel. The said Goel is not examined before the court. According to PW-24, Mr. D.D. Goel is stated to have independently examined the disputed signatures and handwritings with the admitted signatures and handwritings. In the light of non-examination of Goel, much credence cannot be attached to the report which contains the reasons given by D.D. Goel. PW-24 has not pointed out the dissimilarities relating to various factors like pen lift, pen pressure, embellishment etc.

The admitted signatures of Dr. Srinivasan (PW-10), according to the prosecution, were attested by Santosh Kumar who has been cited in the charge sheet, but has not been examined before the court. The IO-Vijaya Rajiv has admitted that he did not obtain the permission of the court to retain the seized documents before they were forwarded to the Government Examiner of Questioned Documents.

As already discussed, PW-1, Narendra Kamath was working as a clerk in the loan section and it was he who had prepared the entire loan papers of Dr. Srinivasan. He has admitted that the loan account of Dr. Srinivasan was closed and there was no loss to the bank on account of the said loan.

Smt. Latha D. Mathe-PW3 was a clerk in the FD Department in BWSSB Branch. Ex. P-25 is the ledger extract of Dr. Srinivasan. She has admitted that it is in her handwriting. According to her, the proceeds of 3153-3157 were transferred to BWSSB Branch from Gavipuram Branch vide VCC 3416/26990. Looking to the said document, she has not been able to say whether Dr. Srinivasan had availed the loan against those deposits which are five in number as against VCC No. 3416 for Rs. 1,00,000/-. As already discussed, no evidence is forthcoming in regard to VCC No. 3416 issued by Gavipuram Branch to Dr. Srinivasan.

Ex. D1-credit challan was confronted to PW-6 and got marked as exhibit on behalf of the accused. It is dated 20.2.1994. PW-6 has deposed that she had told the IO about the loan officer holding the keys of the double lock cupboard in BWSSB Branch and it was for operational convenience, and the said cupboard was being operated frequently. He is also aware of the manual about the double lock system which would disclose that two keys of the double lock would be handled by two persons and not by the 2nd accused only. There is no evidence about the other person who had held the keys of the cupboard containing FD receipts.

As could be seen from Exs. P-1 to P-20, there are 2 signatures on the reverse side of FD receipts. As already deposed by PW-1, at the time of availing loan, one signature on each FD was absolutely required for discharge. The very fact that another signature is also found on the reverse would go to show that it was obtained when the FD receipts were matured and payment was made. Though Dr. Srinivasan has admitted the signatures on Exs. P-1 to P-20, he was not able to say as to when he put the signatures. Normal inference that could be drawn is that the FD receipts were handed over by Dr. Srinivasan to the concerned clerk along with the application seeking loan. The said application stated to have been furnished by the FD holder is not produced before court and no acceptable evidence is placed in this regard.

Exs. P-1 to P-20 was for the period from 26.9.1990 and 28.6.1991. The loan was availed on 2.1.1991 and cleared on 20.4.1991. No occasion for renewal arose in this period and therefore the evidence of Dr. Srinivasan that he might have put his signature at the time of renewal is incorrect and improper.

Exs. P-35 to P-39 are VCC for Rs. 20,000/- each. They disclose that they were originally issued by Gavipuram Branch on 20.6.1990 and transferred to BWSSB Branch on 31.1.1991 and matured on 26.9.1991. Therefore, the theory of these five fixed deposits becoming basis for loan is palpably false. There is absolutely no evidence in regard to Exs. P-35 to P-39 by the IO. In fact, PW-10 has gone to the extent of asserting that he had no deposits in Gavipuram Branch and in the same breath, he has deposed that they were transferred from Gavipuram Branch to BWSSB Branch. This part of the evidence of PW-10 definitely contradicts the evidence of PW13-Prakash and PW3-Latha Mathe.

PW-18, Shivaraman who conducted preliminary investigation, is stated to have submitted a detailed report to the Head Office of the Syndicate Bank relating to the inquiry conducted by him. That is not made available. On the other hand, it is forthcoming from the records that the said report was destroyed. Admittedly the report said to have been furnished by Shivaraman was one relating to the criminal case registered against accused Nos. 1 and 2 and they should not have been destroyed. Ex. D-4 is the guidance on maintenance and preservation of records. In page 7 of Ex. D-4, it is stated that records involved in any criminal investigation should not be destroyed without the permission of the competent authority. No document is made available to show that permission had been obtained before destroying the report said to have been submitted by Shivaraman after conducting preliminary investigation.

In fact, PW-18, Shivaraman has specifically deposed that loan account of Dr. Srinivasan was closed. He has deposed that the other FDs were closed on 29.6.1991 and the amount was paid to him. When this portion of the evidence is read, it discloses that Dr. Srinivasan withdrew certain deposits on 20.4.1991 and closed the loan account. This prima facie falsifies the theory that the 1st accused paid and closed the loan account of Dr. Srinivasan. In page 30 of the judgment, the learned trial judge has given a finding that the loan account of Dr. Srinivasan was discharged in full on 20.4.1991 as per Ex. D-1. He is stated to have received directions to investigate in June 1992 and commenced investigation in the same month. His preliminary report, as mentioned above, is not placed on record and he has not spoken of any statement recorded or anything told to him during his preliminary investigation.

In the light of non-submission of the report said to have been prepared by Shivaraman which is the basis for the bank to suspect the role of accused Nos. 1 and 2, much credence cannot be attached to the evidence of Shivaraman. On the other hand, an adverse inference under Section 114(g) of the Evidence Act will have to be drawn in not producing a very vital report submitted by Shivaraman, by the IO. That report must necessarily have contained all the details relating to the documents verified by him and the statements or information given to him by the staff of the branch.

PW-18 has stated that Rs. 3,88,511/- was remitted to the account of Dr. Srinivasan after arranging another loan in No. LD. 108/91 in the name of Chandrashekar of M/s. Deepam International for Rs. 4,00,000/-. There is absolutely no evidence to substantiate the same. This is stated to be in the handwriting of the 1st accused-N.R. Bhat now marked as Ex. P-68. The relevant entry is at Ex. P-68 (a) and it is authenticated by him after putting his initials which is marked as Ex. -68(b). PW-18 has specifically admitted that the Vigilance Department has got proper guidelines similar to the guidelines of Central Vigilance Commission and he was empowered to issue notices to the concerned for internal investigation. He is stated to have taken the documents from BWSSB Branch. What happened to those documents, is not forthcoming. He is stated to have conducted preliminary investigation for 1/1 1/2 months and had noted the proceedings conducted by him on day-to-day basis and it is also not forthcoming. He is stated to have submitted a detailed report to the higher authorities and has not maintained a copy of the same. It is his case that he had verified the report before giving statement to the IO and it is ununderstandable as to how it could be destroyed. Therefore the argument advanced by the learned senior counsel, Mr. P.S. Rajagopal that the best evidence has been withheld, has a great force.

PW-18 has specifically admitted in paragraph 35 that there is a practice in which a manager can hand over the instrument to the cashier for payment to a very important customer without such a customer waiting in the cash section. Even if it is accepted that amount was paid by the cashier to 1st accused-N.R. Bhat, the possibility of Dr. Srinivasan, being a reputed customer receiving the amount from the 1st accused, cannot be ruled out. As already discussed, IO did not have documents to confront to PW-18 when his statement was recorded as those documents were received by him only on 26.7.1994, long after the recording the statement of PW-18, Shivraman.

Mr. Vijaya Rajiv is examined as PW-6. He has been cross-examined at length by the learned counsel for the accused. He has specifically deposed that prior to taking up the matter for investigation, the entire matter had been investigated by the Vigilance Department of Syndicate Bank and Shivaraman (PW-18), officer in the vigilance section had exhaustively conducted internal investigation. He is silent about the said report submitted by PW-18 to the bank relating to the preliminary investigation. This document should have been produced by the prosecution as PW-18 refers to the said report being verified by him prior to his statement recorded by the IO. It is as good as withholding a very important document and thereby serious prejudice is caused to both the accused.

In fact, accused have examined one Shivaprasad, manager of BWSSB Branch as DW-1. He has deposed that inspection of the branch will be done only once in a year and there will not be any quarterly and half yearly inspection. According to him, if any FD receipts relating to the loan accounts were missing and the same would be noticed by the inspection team, and they would mention the same in the inspection report. He has further deposed that the guidelines in the manual of inspection would be followed to conduct annual inspection.

PW-6, William Fernandes was working in Gavipuram Branch of Syndicate Bank from 1989 to may 1991 and thus he knew both the accused. He has also spoken about the procedure for availing loan on fixed deposit receipts and the marking of lien on the fixed deposits receipts. He has virtually corroborated the evidence of PW-1 Sri Narendra Kamath about this procedure. According to him, Ex. P-22 debit slip contains the signatures of both the accused. But he has specifically deposed that it is the duty of the concerned clerk in the loan section to mentioned about the lien and then only the marking of lien would be certified by the concerned officer. At the same time, he has admitted Ex. P-22 as the document enabling the borrower to withdraw the amount and that Ex. D-1 credit slip dated 20.4.1991 discloses about the repayment of loan and closure of loan account. He has further admitted that a sum of Rs. 3.75 Lakhs had been borrowed by the borrower as per records. He has further deposed that loan documents would be kept in cupboard having double keys, as per instructions found in the manual.

Learned judge of the trial court has attached more importance to the signatures of Accused No. 1 and Accused No. 2 found on Ex. P-22 being identified by PW-6 than looking to the important admissions elicited from his month. If lien is not noted, it would not be a criminal offence; but at the best an irregularity which could be dealt with in a departmental enquiry. In fact, both accused No. 1 and accused No. 2 have admitted their signatures as Ex. P-22 because it is their case that customer Dr. K. Srinivasan had availed loan of Rs. 3.75 lakhs on the strength of fixed deposit receipts the face value of which was Rs. 5 lakhs in all.

Mr. Krishna Rao, CW-17 has been examined as PW-16. He was working as a clerk in BWSSB branch from 1986 in various sections and during his tenure the accused No. 1 and accused No. 2 were working in the same branch. He has deposed about the LD receipt marked as Ex. P-50 dated 20.4.1991 and Ex. D-1 dated 20.4.1991. He was working as a cashier in the branch on 20.4.1991. According to him, after the receipt of Ex. P-50 and Ex. D-1, he credited a sum of Rs. 3,88,511/- in to the loan account of Dr. Srinivasan out of Rs. 4,00,000/- mentioned in the debit slip Ex. P-50 and gave the remaining amount in cash to accused No. 1 Sri. N.R. Bhat.

Now, we will have to see both Ex. P-50 and Ex. D-1. Ex. P-50 is a debit slip dated 20.4.1991 of BWSSB branch relating to loan No. LD. 108/91 for a sum of Rs. 4,00,000/-sanctioned against fixed deposit. On the reverse side, the token number is mentioned as 555. The name of the account holder LD. 108/91 is not forthcoming; but the signature of the loanee is found on both the sides of Ex. P-50.

In the charge sheet, an allegation is made against these accused Nos. 1 and 2 stating that both of them had availed a loan of Rs. 4,00,000/- on 20.4.1991 against the fixed deposit receipts of a customer M/s. Deepam Silks International by forging the signature of the customer/ fixed deposit holder. If the allegation found in the charge sheet is accepted, Ex. P-50 refers to the said allegation. But no charge is framed against these accused in this case that both of them availed loan of Rs. 4,00,000/- on the fixed deposit receipts of M/s. Deepam Silk International on 20.4.1991 to repay the loan of Dr. K. Srinivasan. Even PW-16 Krishna Rao has not deposed anything in his evidence to this effect.

What is deposed by the PW-16 is that Ex. P-50 is in the handwriting of accused No. 1 N.R. Bhat and that along with Ex. P-50 he received Ex. D-1 credit slip when he was in cash section. He has further deposed that out of Rs. 4 Lakhs pertaining to Ex. P-50, he credited Rs. 3,88,511/- to the loan account of Dr. Srinivasan and paid the remaining balance in cash to accused No. 1-N.R. Bhat. He is not competent to say that Ex. P-50 is in the handwriting of accused No. 1. He has specifically admitted that no written slip was issued by him to accused No. 1 for paying the remaining amount in cash to accused No. 1 and that he had not taken any acknowledgement from accused No. 1 to that effect. The concerned customer of M/s. Deepam Silks International on whose fixed deposit Rs. 4 Lakhs was allegedly availed as loan by accused Nos. 1 and 2, has not been examined to confront the signature of the customer found thereon. Non-examination of such a material witness paves way for drawing an adverse inference as per Section 114(g) of the Evidence Act.

PW-24, Sri Amarsingh, handwriting expert has not spoken anything about Ex. P-50 with reference to the handwriting and signatures found thereon. This being the position, the learned Judge could not have considered Ex. P-50 as a proved document to connect with this case i.e., loan of Dr. K. Srinivasan. When the Trial Court has acquitted these accused in regard to the loan availed on the fixed deposits of one customer Mrs. D. Urmila on the ground of Urmila being not examined, the same yardstick should have been applied in the light of customer of M/s. Deepam Silk being not examined. On the other hand PW-24 has clearly admitted in his evidence that he has not mentioned specifically the original position of the documents while taking the negatives and this juxtaposition could always be verified with the original documents that were before the court. He has further admitted in paragraph 14 of his evidence that for comparison the proximity of standard materials is the good materials and that after the lapse of long period, there would be variations of a person in the writings and signatures. What exactly are the relevant factors in comparing admitted signatures/handwriting with the disputed signatures, has been considered by a Division Bench of this court in the case of Ravjappa Vs. Nilakanta Rao and Others, (1962) CriLJ 441 , wherein it is specifically held that dissimilarities noticed are important while evaluating evidence of a handwriting expert. Paragraph 23 of the judgment is very relevant and it is reproduced below:

"In examining a disputed document, the true test is not the extent of the similarities observed when compared with genuine documents, as forged documents usually are good imitations of genuine documents, but the nature and extent of the dissimilarities noticed. It is these differences which expose the true character of the document in question."

In fact credit slip dated 20.4.1991 for Rs. 3,88.511/-, according to PW-16, bears the signature of accused No. 1. PW-24 has neither referred to Ex. D-1 nor spoke anything about the same. In fact it is the document furnished by the prosecution but has not been made use of in any manner by the prosecution. On the other hand, it was confronted to PW-16 by the counsel for accused and got marked as Ex. D-1 to impress upon the court that no financial loss had been caused to the bank in any manner and that loan account of Dr. Srinivasan had been closed.

It is ununderstandable as to how Ex. P-50 could be given to PW-16 by accused No. 1 since token No. 555 had been issued to the customer to get the cash from the cash section. Pw16 has not spoken anything about it. PW-16 was examined almost nine (9) years after his statement was recorded and it is understandable as to how he could remember the same when hundreds of customers had drawn cash from cash section every day.

The learned Judge has simply believed the evidence of PW-17, V.J. Shenoy who was the cashier of BWSSB branch on 2.1.1991. He has deposed in his examination-in-chief that he paid Rs. 3.75 lakhs to N.R. Bhat on 2.1.1991 since he gave token to him. But during the course of cross-examination, PW-17 has deposed that token is not an instrument. But he has admitted that while giving statement to the IO i.e. PW-26 that he did not tell him that he paid cash against the instrument. This is a very serious contradiction and the same has been ignored by the learned judge while assessing the evidence. Similarly, on being cross-examined by the leaned counsel for 2nd accused, he has deposed that in Ex. P-22, 2nd accused has not ordered to ''PAY CASH.'' But he has specifically admitted that while giving statement to the IO, he has stated that loans officer of the branch has ordered ''PAY CASH.'' This is also a serious contradiction which goes to the very credibility or reliability of this material witness relating of an important aspect about of the person to whom he actually paid the amount. This material contradiction has not been properly considered while evaluating the oral evidence of PW-17.

PW-18, Shivaraman who conducted preliminary investigation, has deposed that during his inspection, he wanted to know how the funds of LD. 1/91 was utilized as customer, Dr. Srinivasan had emphatically denied the availment of loan by him. Therefore he is stated to have discussed with PW-17. V.J. Shenoy is stated to have informed about the payment of amount to N.R. Bhat by him. If this was really so, he should have recorded the statement of V.J. Shenoy or at least mentioned in his report. The statement of PW-18 was recorded by the IO, as per PW-18, on two occasions and on both these occasions, he had not been shown the preliminary investigation report by the IO. PW-18 has emphatically deposed that he had verified his report before giving statement to the IO. His statement was recorded on 4.9.1993, 11.9.1993 and on 18.9.1993.

Hence it is relevant to look to Ex. D-5, the written reply given to the special judge by the Zonal Inspectorate of Syndicate Bank, Bengaluru, on 31.12.2003 stating that the inspection reports of BWSSB branch for the year 1989 to 1994 were destroyed. PW-18 has deposed that he received written direction to conduct internal investigation BWSSB Branch in June 1992 of and commenced investigation in the same month and that he took all the documents from the branch relating to loan account of Dr. Srinivasan. He had submitted a report to the Inspectorate. As per the norm 3 of Chapter IV of the Guidance on Maintenance, Preservation and Destruction of Records issued by the head office of the bank vide Ex. D-4, such of those records relating to in any investigation into fraud cases should not be destroyed without the permission of the competent authority. It is ununderstandable as to how such an important report relating to serious irregularity/fraud in the bank could be destroyed within 14-15 months of the submission of the report. The date of destruction of the said report is not forthcoming in Ex. D5, letter dated 31.12.2003 addressed to the trial court.

As already discussed, an adverse inference will have to be drawn under Section 114(g) of the Evidence Act in the light of non-production of this important report. Thus serious prejudice is caused to the accused. In paragraph 48 of the judgment, the learned judge has drawn an adverse inference against the 1st accused-N.R. Bhat for not leading any evidence to show that the recipient of Rs. 3,75 lakhs was not himself but a third party. This approach of the learned judge is totally erroneous and incorrect. In a criminal case, the initial burden is always on the prosecution to prove the guilt of the accused beyond reasonable doubt. In fact the degree of proof required in criminal cases is higher than the preponderance of probabilities which is applicable in civil cases. Unless the initial burden is effectively discharged by adducing proof beyond reasonable doubt, onus does not shift on the adversary in spite of inadequacy in regard to the probabalizing the defence of the accused.

Learned judge has made use of Section 106 of the Evidence Act in paragraph 48 of the judgment on the ground stating that 1st accused should have adduced evidence to probablize that he was not the recipient of the amount. It is not the case of PW-10, Dr. Srinivasan that the two signatures found on Exs. P-1 to P-20 and Exs. P-35 to P-39 are not his signatures. Unless the signature is obtained for discharge, no loan application would be processed. In the light of the evidence of PW-1, Narendra Kamath, no loan paper based on FD receipts would be processed unless FD receipts are produced along with the loan application in the prescribed form, with the signature for discharge. It is not the case of PW-1 that no loan application was submitted by the FD holder and that no FD receipts were produced. Apart from this, Ex. P-22 is in his own handwriting. This is the genesis for availment of loan. PW-10 has categorically deposed that all FDs, i.e. Exs. P-1 to P-20 and Exs. P-35 to P39 were with him till encashment. This paradox topples the whole case of the prosecution. If he was really in possession of those FD receipts throughout till encashment, there is no evidence to show as to how the accused persons could have been in custody of these FD receipts which are alleged to have been converted for their own use, by committing breach of trust punishable under Section 409, I.P.C. and Section 13(1)(c) of the P.C. Act, 1988.

Exs. P-1 to P-20 and Exs. P-35 to P-39 and the loan application with connected annexures and stamped receipt had allegedly come to the hands of the accused. Prosecution is expected to prove this material aspect and has thoroughly failed to do so. Thus Section 106 of the Evidence Act cannot be made applicable in this case. In fact a Bench consisting of three Hon''ble Judges of the apex court in the case of Gopal Krishnaji Ketkar Vs. Mahomed Haji Latif and Others, AIR 1968 SC 1413 : (1968) 3 SCR 862 , has held as follows in regard to Sections 103 and 114(g) of the Evidence Act:

"If a party in possession of best evidence which would throw light on the issue in controversy withholding it, court must draw an adverse inference against him notwithstanding that the onus of proof does not lie on him and hence the party cannot rely on abstract doctrine of onus of proof or that he was not called upon to produce it."

This assumes much significance in the light of non-production of preliminary report by Shivaraman or the IO. Similarly non-examination of Chandrashekar of M/s. Deepam Silk International to prove Ex. P-50 enables the court to draw adverse inference. In view of illustration (g) to Section 114 of the Evidence Act, as held earlier by the Hon''ble apex court in the case of Habeeb Mohammad Vs. The State of Hyderabad, AIR 1954 SC 51 : (1954) 1 SCR 475 . This material witness is not examined. But prosecution wants to rely upon Ex. P-50 without getting it marked as an exhibit, but wants to rely on it when it was got marked by the accused after confronting it to PW-6. It is held in the above decision rendered by a Bench of Hon''ble three Judges as follows:

"Witnesses essential to the unfolding of the narratives on which the prosecution case is based must, of course, be called by the prosecution, whether in the result the effect of their testimony for or against the case of the prosecution."

As already pointed out by the learned senior counsel, Mr. P.S. Rajagopal and Mr. Kiran S. Javali, the defence theory is probablized by the evidence of PW-1 (Narendra Kamath) and PW-15 (H.S. Sreenivasan). They have specifically deposed that the loan application and related documents had been produced by the loanee and they were processed for payment of loan. They have further deposed that the FD receipts were not at all entrusted to accused Nos. 1 and 2 and as such, they were not in custody of these documents. Accused Nos. 1 and 2 have only signed the necessary documents as manager and assistant manager since they had been thoroughly scrutinized in all respects by the concerned clerk in the loan section. They had no pecuniary benefits for themselves or for others. Sufficient evidence is placed on record to show that the loan amount of Dr. Srinivasan was closed by loanee himself.

PW-1, Narendra Kamath has not whispered anything regarding the alleged portion of Ex. P-22(c) as forged one. Per contra, he has specifically deposed that the signature portion found in Ex. P-22 had already been obtained by him from the party in his presence and it was placed before the 2nd accused for checking, and then it was placed before the 1st accused. The evidence of PW-1 totally negatives the allegation made to the effect that the 1st accused forged Ex. P-22.

Learned counsel for the accused, Mr. P.S. Rajagopal and Mr. Kiran S. Javali have vehemently argued that the investigation conducted by Mr. Vijaya Rajiv is a tainted one and it has caused prejudice. As could be seen from the statements of material witnesses recorded by the IO, the relevant documents had not been obtained from the bank prior to recording their statements. From this, it is evident that the IO had not at all taken the relevant documents before recording the statement of material witnesses. This has also caused serious prejudice to the accused.

Ex. P-100 is a letter dated 2.8.1994 addressed to the IO by Syndicate Bank. Similarly Ex. P-98 under which Exs. P-1 to P-20 were submitted is dated 26.7.1994 and by this time the statements of material witnesses had already been recorded. Ex. P-96 is a letter addressed by the bank to the IO on 3.9.1993 furnishing as many as 135 documents. They were also secured by the IO long after investigation had commenced and statements of material witnesses recorded. Similar is the case with Ex. P-97, letter dated 7.9.1994 addressed by N. Chandrashekar, partner of M/s. Deepam Silks International to the IO furnishing 4 documents. Unless these material documents were received and kept with him, he could not have recorded the statements of material witnesses and therefore, serious contradictions are forthcoming in the very evidence of material witnesses.

Exs. P-35 to P-39 are five FD receipts issued by Syndicate Bank, BWSSB Branch for Rs. 20,000/- each. Their numbers are 3642-3646. They were issued on 31.1.1991 to be presented on or before 26.9.1992 for encashment. They also bear the signature of Dr. Srinivasan on the reverse at two places, whereas Ex. P-22 contains a reference to one VCC for Rs. 1,00,000/- bearing No. 3416 and that is not to be found.

Prosecution has made an attempt to impress upon the court that the loan was actually obtained also on the strength of Exs. P-35 to P-39 which fact is belied by the entry relating to VCC for Rs. 1,00,000/-. This aspect of the matter has been totally lost sight of by the trial court. The ledger extracts, to be admissible in evidence, have to be certified in accordance with Section 4 of the Bankers Books Evidence Act. It should have been certified as extracts of the books of account maintained in the usual and ordinary course of business and that such books are still in the custody of the bank.

Ex. P-67 is a letter stated to have been written by Dr. Srinivasan to PW-18, Shivaraman who was conducting investigation, on 14.9.1992 stating that he had not availed any loan against the security of FD receipts. But this was not got marked by Dr. Srinivasan. If he had not availed any loan on these FD receipts as mentioned in Ex. P-67, he should have explained as to how the bank was in custody of these FD receipts. Therefore, it is argued that the very genesis of prosecution case appears to be doubtful. There is a lot of force in the submission made by the learned counsel for the accused.

During the course of examination under Section 313, Cr.P.C., 1st accused has emphatically denied the incriminating material put to him in question Nos. 97, 98 and 100. He has specifically denied the suggestion put to him that Ex. P-50 is in his handwriting. Similarly he has denied that a sum of Rs. 3,88,511/- was paid into the account of Dr. Srinivasan by him and the remaining amount was given by PW-16 to him. He has further denied a suggestion put to him in question No. 100 that Ex. P-22 is the document for availing loan by him on the strength of FD receipts of Dr. Srinivasan. He has submitted written arguments as contemplated under Section 314, Cr.P.C. and it is appended to the examination conducted under Section 313, Cr.P.C. Similarly the 2nd accused has also filed such written statement as contemplated under Section 314, Cr.P.C.

The learned judge has applied Section 106 of the Evidence Act. Section 106 speaks about the burden of proving a fact especially within knowledge. The provision is reproduced below:

"Section 106. Burden of proving fact especially with knowledge- When any fact is especially with the knowledge of any person, the burden of proving that fact is upon him."

As per the decision reported in Ch. Razik Ram Vs. Ch. Jaswant Singh Chouhan and Others, AIR 1975 SC 667 : (1975) 4 SCC 769 , Section 106 cannot be made applicable when the fact is such as could be capable of being known also by persons other than the parties. Section 106 does not cast on the accused the burden of proving that no offence was committed. Section 106, Evidence Act refers to a case where the defence of the accused on the fact of proving a fact is within his knowledge and of nobody else.

In the present case, the evidence of material witnesses discloses that the loan on FD receipts cannot be granted unless the original FD receipts are furnished along with the loan application and a stamped receipt. It is also mandatory that the stamped receipt should contain the signature of the loanee and expected to put his signature on the FD receipt regarding discharge also. Certain other procedures are also provided as to how the loan papers are to be processed before they are put up before the concerned officer and manager.

Section 106, Evidence Act is certainly not intended to relieve the prosecution of its burden of proof. It is designed to meet certain exceptional cases only in which it would be impossible or at any rate disproportionately difficult for the prosecution to establish facts which are especially within the knowledge of the accused and which he could prove without difficulty or inconvenience.

As pointed out by the Hon''ble Supreme Court in the case of Shambu Nath Mehra Vs. The State of Ajmer, AIR 1956 SC 404 : (1956) CriLJ 794 : (1956) 1 SCR 199 if a knowledge of certain facts is as much available to the prosecution on exercise of due diligence and care, case cannot be said to be ''established'' within the knowledge of the accused. Therefore the burden of proving the guilt of the accused in a criminal case mainly rests on the prosecution and does not shift on the accused by virtue of Section 106, Evidence Act.

Viewed from any angle, the trial court is not justified in applying the provisions of Section 106, Evidence Act to the facts of this case. There is absolutely no evidence in regard to the theory of conspiracy attributed to accused Nos. 1 and 2 which is the foundation of the prosecution case. The learned judge has not analyzed the entire oral and documentary evidence in right perspective and has adopted a wrong approach to the real state of affairs. Learned judge has failed to take into consideration that burden of proof in the present case was heavy on the prosecution in respect of the ingredients of all the charges and the same has not been effectively discharged. Learned judge has failed to take into consideration the probable defence raised on behalf of the accused. When the prosecution has thoroughly failed to prove the guilt of the accused beyond reasonable doubt and in the light of the probability of the case setup by the accused, the benefit of doubt will have to be given to them. Hence, point No. 3 is answered in the negative.

Point No. (4): In view of the finding on point Nos. (1) to (3), both the appeals will have to be allowed in entirety and consequently the judgment of conviction and sentence will have to be set aside. Accordingly, both the accused are entitled to be acquitted by giving the benefit of doubt.

In the result, the following order is passed:

ORDER

Both the appeals filed under Section 374(2), Cr.P.C. are allowed by setting aside the judgment of conviction and sentence passed in Spl. C.C. 150/95 by the XXI Additional City Civil and Sessions Judge, Bengaluru. Accordingly the accused are acquitted of all the charges leveled against them. Bail bonds executed by the accused and their sureties stand cancelled.