S. Pradeep Kumar vs State Of Kerala

The revision petitioner is the second accused in the case C.C.No.15/2013 pending in the Court of the Enquiry Commissioner & Special Judge,

Thiruvananthapuram.

The offences alleged against the accused in the case are under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988

and under Sections 420, 468 and 471 read with 34 IPC and under Section 120B IPC.

The first accused was the Branch Manager of the Kerala State Co-operative Bank, Medical College Branch, Thiruvananthapuram (for short 'the

Bank') during the period from 1.9.2004 to 25.2.2006. The prosecution case relates to a transaction in which an amount of twentyfive lakhs rupees was

granted to the second accused as loan from the Bank.

The prosecution case against the accused, as stated in the final report filed by the Dy.S.P., Vigilance and Anti-Corruption Bureau (VACB), is as

follows:

“ That A-1 being the Branch Manager of Kerala State Co-operative bank, Medical College Branch, Thiruvananthapuram from 01.09.2004 to

25.02.2006 and as such being a public servant entrusted with the day to day transactions, proper maintenance and upkeeping of records ensuring

safety and security of valuables, property and the funds of the Bank to protect the best interest of the bank etc. made criminal conspiracy with A-2

and in furtherance of the said conspiracy hatched between A-1 and A-2, A-1 by abusing his official position flouted all norms and guidelines and with

their common intention to cheat and cause wrongful loss to the Bank, A-1 introduced A-2 for opening a current account in the Bank and thereafter

obtained an ingenuine term loan application of Rs.25 lakhs from A-2 which was supported by false and forged documents such as lease agreement,

invoice and vouchers and A-1 without conducting any verification and by suppressing material facts with the connivance of A-2, A-1 recommended

the loan application to the head office for obtaining loan for A-2 while the loan application was under process, A-1 sanctioned a mortgage loan to the

tune of Rs.10 lakhs, so as to facilitate A-2 to obtain the said mortgage loan by using the same collateral security offered by A-2 for his term loan and

disbursed the mortgage loan of Rs.10 lakhs to A-2 on 10.06.2005 and thereafter the term loan was sanctioned by the executive committee. A-1

disbursed the loan amount to A-2 by flouting all norms and thereby A-1 caused undue pecuniary advantage to A-2 and the Bank sustained a loss of

Rs.25 lakhs towards the disbursal of the said loan amount to A-2 and hence A-1 and A-2 committed the offences punishable under the above

provisions of law.â€​

The second accused has filed this revision petition challenging the charges framed against him by the Special Court.

Heard the learned counsel for the petitioner and the learned Public Prosecutor.

The main grounds stated in the revision petition, in challenging the charges framed against the petitioner by the trial court, are the following: (1)

There are no sufficient materials produced by the prosecution to prove the charges levelled against the petitioner. The Special Court did not apply its

mind to find out whether there was sufficient ground for proceeding against the petitioner. (2) The nature of the allegations raised against the

petitioner are purely civil in nature. (3) The materials on record produced by the prosecution do not disclose the commission of the offences alleged

against the petitioner.

Learned counsel for the petitioner made submissions before this Court elaborating the above mentioned grounds. The sum and substance of the

submissions is that the loan was sanctioned to the petitioner by the Bank on the basis of the security offered by him by creating equitable mortgage in

respect of his property and that the security so offered was sufficient and proper. According to the learned counsel for the petitioner, it was a pure

and simple loan transaction and the loan amount was disbursed to the petitioner after sanction obtained from the Head Office of the Bank on verifying

the entire documents produced by him.

Per contra, learned Public Prosecutor has submitted that the petitioner had produced false and fabricated documents in the Bank for sanctioning the

loan and the first accused had made dishonest representation to the Head Office in recommending the loan on the basis of such documents.

Learned Public Prosecutor would submit that, commission of the offence of conspiracy can very well be inferred from the facts and circumstances of

the loan transaction as revealed from the materials produced by the prosecution.

At the outset, it is to be stated that the petitioner had not filed any application for discharge before the trial court. Learned counsel for the

petitioner has fairly stated before this Court that the petitioner had also not raised any plea of discharge at the time of the hearing contemplated under

Section 239 of the Code of Criminal Procedure, 1973 (for short 'the Code').

The petitioner had submitted application to the Bank for granting a loan of twentyfive lakhs rupees. The application was made for granting term

loan. There is no dispute with regard to the fact that the first accused, while he was serving as the Branch Manager of the Bank, disbursed an amount

of ten lakh rupees to the petitioner as loan. According to the prosecution, he had disbursed the aforesaid amount to the petitioner while the application

and the other documents for sanctioning a loan of twenty five lakhs rupees had been submitted to the Head Office of the Bank and while loan

application was under the consideration of the Head office. The balance amount was disbursed to the petitioner after sanction was obtained from the

Head Office. The petitioner would contend that he had offered sufficient security for the loan availed of by him from the Bank by creating equitable

mortgage in respect of his property and there was nothing illegal or irregular in the loan transaction.

However, the learned Public Prosecutor has invited the attention of this Court to the statements of certain witnesses and also certain documents

produced by the prosecution in support of the contention that there was a conspiracy between the first and the second accused to cheat and defraud

the Bank by using false and fabricated documents.

The witness E.G. Mohandas (CW2) was the Regional Manager of the Bank. His statement reveals the following facts: Application for a term loan

shall be accompanied by a project report. The Branch Manager of the Bank has to be satisfied about the viability of the project. If the loan application

is for starting any new business, the Manager has to inspect the site and make a site visit report. The loan sanctioned by the Bank to the petitioner

was for starting a power laundry unit. When CW2 inspected the site in connection with the enquiry conducted by him, what he could see there was a

temporary asbestos shed and two rusted machines and it was contrary to the details stated in the loan application. There was no water connection or

electricity connection there. There was also no power laundry unit installed there. The first accused had given a wrong site visit report to recommend

sanctioning of the loan to the petitioner. It was the first accused who introduced the second accused to the Bank to open the current account in the

Bank. As per the rules, no Bank staff shall not introduce a customer to open current account in the Bank. The first accused disbursed ten lakhs

rupees to the petitioner while the loan application and other documents were under processing by the Head Office.

The witness Padmanabhan Nair (CW4) was the Deputy General Manager of the Bank. His statement reveals the following facts. If the

application for loan is for an amount above ten lakh rupees, the loan application and other documents shall be forwarded to the Head Office for

consideration along with the recommendation of the Manager. When CW4 inspected the project site in connection with the enquiry conducted by him,

he saw there only a shed made of tin sheets and one or two rusted machinery. There was no electricity and water connection there. The petitioner

had submitted receipts and invoices showing purchase of machinery from the establishment by name Pentakon India (Systems and Solutions) Private

Limited. On verification, the sales tax registration numbers shown in these documents were found to be false. The sale tax registration number shown

in these documents was in the name of an establishment by name 'Comput Tech'.

The witness Vidhu (CW5) is the owner of the property which was leased out to the petitioner for starting the power laundry unit. His statement

shows the following facts: He had constructed a temporary shed in his property for starting a poultry farm but he cannot start the business. There was

no number allotted to the shed by the local authority. There was also no water connection or electric connection to the shed. An agreement was

executed between him and the petitioner on 29.5.2003 by which he leased out the shed to the petitioner. The lease agreement dated 15.4.2004 (which

was produced by the petitioner in the Bank) was not executed by him (CW5). He is also not acquainted with the witnesses mentioned in that

agreement.

The witness Jayaraj (CW9) was the Deputy General Manager in the Industrial Loan Department of the Bank. His statement reveals that, after

forwarding an application for sanctioning a loan of above ten lakhs rupees to the Head Office, the Branch Manager of the Bank has no authority to

sanction and disburse a loan of ten lakhs rupees on the same application.

The witness Muthukumar (CW10) was an Assistant Engineer in the Kerala Water Authority. His statement reveals that there was no water

connection given in the name of the power laundry unit allegedly conducted by the petitioner.

The witness Anitha.G. Nair (CW12) was the Assistant Executive Engineer of the Electrical Sub Division, Kesavadasapuram, Pattom,

Thiruvananthapuram. Her statement reveals that there was no electric connection provided in the name of the power laundry unit allegedly conducted

by the petitioner.

The witness S.Mohan (CW13) was the Commercial Tax Officer, IIIrd Circle, Thiruvananthapuram. According to the prosecution, the invoices and

the receipts for purchase of machinery produced by the petitioner were issued from M/s.Pentakon India (Systems and Solutions) Private Ltd. The

statement of CW13 shows that no such establishment by name M/s.Pentakon India (Systems and Solutions) had been registered in the IIIrd Circle of

the Sales Tax Office, Thiruvananthapuram.

The witness K.R.Satheesh (CW18) was the owner of the establishment by name 'Computech Systems'. His statement reveals that the sales tax

registration numbers shown in the receipts and invoices produced by the petitioner in the Bank had been issued in the name of the establishment

conducted by him (CW18). His statement also reveals that he had not conducted any establishment by name M/s.Pentakon India (Systems and

Solutions) Private Limited.

The facts emerging from the statements of the aforesaid witnesses are, prima facie, sufficient to establish the case against the petitioner for the

offences alleged against him. The statements of the aforesaid witnesses would, prima facie, reveal that the petitioner had produced false and

fabricated documents in the Bank for the purpose of obtaining loan from the Bank. In such circumstances, the contention of the learned counsel for

the petitioner that it was a pure and simple loan transaction cannot be accepted at this stage. The materials produced by the prosecution are sufficient

to establish a prima facie case against the petitioner. The conspiracy hatched between the petitioner and the first accused can be inferred from the

conduct of the first accused in recommending the loan on the basis of the false and fabricated documents produced by the petitioner and also in

granting an amount of ten lakhs rupees to the petitioner as loan while the loan application and the other documents were under processing by the Head

Office of the Bank.

No doubt, as contended by the learned counsel for the petitioner, framing of charge is the first major step in a criminal trial where the Court is

expected to apply its mind to the entire record and documents placed therewith before the Court. Framing of charge is a major event where the Court

considers the possibility of discharging the accused of the offence with which he is charged or requiring the accused to face trial. In a case where,

upon considering the record of the case and documents submitted before it, the Court finds that no offence is made out or there is a legal bar to such

prosecution under the provisions of the Code or any other law for the time being in force and there exists no ground to proceed against the accused,

the Court may discharge the accused. There can be cases where such record reveals the matter to be so predominantly of a civil nature that it neither

leaves any scope for an element of criminality nor does it satisfy the ingredients of a criminal offence with which the accused is charged. In such

cases, the Court may discharge the accused or quash the proceedings against him. (See C.B.I v. Dr. Anup Kumar Srivastava : AIR 2017 SC 3698).

However, it is a settled principle of law that at the stage of considering an application for discharge the court must proceed on the assumption that

the material which has been brought on the record by the prosecution is true and evaluate the material in order to determine whether the facts

emerging from the material, taken on their face value, disclose the existence of the ingredients necessary to constitute the offence (See State v.

Hiremath : AIR 2019 SC 2377).

In the instant case, the petitioner had not filed any application for discharge. He had also not advanced any plea before the trial court that the

materials produced by the prosecution are not sufficient to establish a prima facie case against him. In such circumstances, the trial court had no

necessity or occasion to pass a speaking order before framing the charge against the accused in the case.

If the trial court decides to frame a charge, there is no legal requirement that it shall pass an order specifying the reasons as to why it opts to do

so. Framing of charge itself is prima facie order that the trial court has formed the opinion, upon considering the police report and other documents and

after hearing both sides, that there is ground for presuming that the accused has committed the offence concerned (See Kanti Bhadra Shah v. State of

West Bengal : AIR 2000 SC 522).

The contention of the petitioner that the facts of the case implicate him to answer only a civil liablity is without any basis. Where allegations give

rise to a civil claim and also amount to an offence, merely because a civil claim is maintainable, it does not mean that a criminal prosecution is not

maintainable. At this juncture, it is advantageous to quote the observations made by the Apex Court in State of Madya Pradesh v. Rameshwar :

(2009) 11 SCC 424, which read as follows:

“The judgments referred to by Mr.Tankha regarding the tendency to convert civil disputes into criminal cases to pressurise the accused are

unimpeachable, but the same will not apply to the facts of this case where a conspiracy to cheat the Bank is alleged.â€​

The trial court is not expected to hold a roving inquiry into the pros and cons of the case at the stage of framing charges by weighing the evidence

as if it is conducting the trial. The court is not expected to go deep into the probative value of the material on record.

Offence of criminal conspiracy has its foundation in an agreement to commit an offence. The most important ingredient of the offence of criminal

conspiracy is the agreement between two or more persons to do an illegal act or an act not illegal by illegal means. For an offence punishable under

Section 120-B IPC, the prosecution need not necessarily prove that the perpetrators expressly agreed to do or cause to be done an illegal act; the

agreement may be proved by necessary implication.

Dealing with exercise of revisional jurisdiction of the High Court in interfering at the stage of framing the charges, in Om Wati v. Delhi

Administration (AIR 2001 SC 1507), the Apex Court has held as follows:

“Self restraint on the part of the High Court should be the rule unless there is a glaring injustice staring the court in the face. The opinion on many

matters can differ depending upon the person who views it.

There may be as many opinions on a particular point, as there are courts but that would not justify the High Court to interdict the trial. Generally, it

would be appropriate for the High Court to allow the trial to proceedâ€​.

True, the charge framed by the trial court against the accused in the case lacks clarity. But, it is not a sufficient ground to set aside the charge. In

view of the provision contained in Section 464 of the Code, the question whether on account of any error, omission or irregularity in framing charge,

failure of justice has been occasioned or not, is a matter to be decided after the trial of the case.

In the aforesaid circumstances, I find no sufficient ground to set aside the charges framed against the petitioner by the Special Court. The revision

petition is liable to be dismissed.

Consequently, the revision petition is dismissed.