H.A.SEETHARAM Vs. STATE

JUDGEMENT

(1.) These two appeals are filed by accused Nos.1 and 2, respectively challenging the judgment of conviction and sentence, dated 05.02.2011 passed in Special C.C.No.10/2007, on the file of the XXXII Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bangalore (CCH-34).

(2.) The factual matrix of the case is that accused No.1 who was working as the Manager, Canara Bank, SSI Branch, Mysore, during 2002 to 2004 entered into criminal conspiracy with accused No.2, Managing Director of M/s. Padmashree Products Pvt. Ltd., Mysore ('M/s. PPPL' for short) in the matter of sanction and disbursement of various credit facilities to accused No.2 and cheated the bank. Accused No.1 had sanctioned Rs.12.5 lakhs to accused No.2 during November 2002, without conducting proper verification, appraisal and assessing the working capital requirements, though the Company was suffering loss as on 31.03.2002. He had sanctioned Rs.10,00,000/- as usance revolving LC limits to accused No.2 in excess of his delegated powers, without obtaining the prior approval of the competent authority. It is further alleged that in June 2003, accused No.1 had recommended OCC limit of Rs.25,00,000/-, machinery loan limit of Rs.5,00,000/-, supply bill discounting limit of Rs.50,00,000/-, Light Heavy Vehicles limit of Rs.6.5 lakhs and bank guarantee of Rs.30 lakhs, without verifying the activity level of accused No.2. Based on which accused No.1 sanctioned the same on 26.06.2003. The irregularities were committed in the disbursal of the said loan and misappropriated the funds of the bank by committing criminal breach of trust and cheated the bank. The accused during 2002 to 2004 functioning as public servant being party to a criminal conspiracy with accused No.2, in furtherance of the criminal conspiracy and agreement, forged the documents in connection with advancing loan to accused No.2 with an intention to cheat the bank and made use of the forged documents as genuine and cheated the bank without apprising the loan application, security furnished and sanctioned the loan. The accused without verifying the security furnished being interested with the public money, committed criminal breach of trust by allowing accused No.2 to avail advances without furnishing proper security and thereby he misappropriated the funds of the bank and he misused his position as a public servant. The charges levelled against accused No.1 is that he committed the offence punishable under Section 120B read with Sections 468 , 471 , 420 and 409 of IPC and under Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act.

(3.) The charge against accused No.2 is that he being the Managing Director of M/s.PPPL, had submitted an incomplete application for bill/cheque discounting facility of Rs.3,00,000/- and inland revolving letter of credit facility of Rs.10,00,000/- to the branch on 10.02.2003, without furnishing any details as required under various columns in the application form. Accused No.2 also had submitted the application dated 18.06.2003 for enhancement of cash credit facility from Rs.7.5 lakhs to Rs.25 lakhs, sanction of supply bill limit of Rs.50 lakhs and bank guarantee limit of Rs.30 lakhs for procurement of oil from M/s. Ruchi Soya Industries Limited. Accused No.2 with dishonest and fraudulent intention, submitted false financial statement showing inflated sales turn over, which is at variance with that filed by his Company in the office of the Assistant Commissioner of Commercial Tax, Commercial Tax Officer, VI Circle, Mysore, with a view to dishonestly induce the bank to part with its public funds and thereby committed cheating on the bank. As per the details submitted by accused No.2, for the year 2000-01, the actual sales as reported in sales tax returns both under KST and CST is Rs.3,94,437/-, but sales turn over as furnished to Canara bank is Rs.39,25,555/-. In respect of 2001-02, the actual sales is Rs.70,680/-, but sales turn over furnished is Rs.39,52,165/-. In respect of 2002-03, the actual sales is nil, but shown as Rs.34,57,673/-.