MIR NAGVI ASKARI v. C. B. I

Citation: [2009] 13 S.C.R. 124

Court: Supreme Court of India

Bench: S.B. SINHA, CYRIAC JOSEPH

Case summary

MIR NAGVI ASKARI v. C. B. I.pdf

Judgment text

[2009] 13 (ADDL. ) s. c:R. 124 MIR NAGVI ASKARI + v. C. B. I. (Criminal Appeal No. 1477 of 2004) AUGUST 7, 2009 [S. 8. 51. NHA AND CYRIAC JOSEPH, JJ. ] ... ,. _ PENAL CODE, 1860/PREVENT/ON OF CORRUPTION ACT, 1988: Sections 109, 120A, 120B, 410, 411, 463, 464, 467, 471, 4771113(1), 13(2) - Bank Officers Accused Nos. 1, 2, 4, 5 unlawfully and dishonestly permitting Accused No. 3 (Power broker in securities transactions) to withdraw substantial amounts - Wrongful loss to Bank - Criminal conspiracy - Receiving of stolen property - Crimina__I breach of trust - Accused .

convicted and sentenced by Special Court - On appeal, Held: Criminal conspiracy established against Accused 1 to 4 - No conclusive evidence as regards involvement of A-5 - A-5 also acquitted of all charges under the Prevention of Corruption Act - A-1, A-2 and A-4 being public servants guilty of offences under Section 13(1) rlw Section 13(2) as also Section 13(1)(d) rlw Section 13(2) of Prevention of Corruption Act - Expression direction of law in the context of Sections 405 and 409 /PC includes not only legislations but also directions instruments and circulars issued by an authority entitled ·therefor - Accused could not have been convicted with making of false document - Conviction under Section 471, 477A set aside~ A-3 guilty of offence under Section 411 since he had dishonestly received stolen property - A-3 also guilty of offences punishap!

e under Sections 120B, 411 rlw 120-B /PC - Sentence imposed accordingly - Since CBI has not preferred any appeal against the quantum of sentence, higher sentence could not be MIR NAGVI ASKARI v. C. B. I. 125 imposed on A-3. BANKING - BANKER AND CUSTOMER: An officer of a bank holds a position of trust - Expected to perform his duties also in terms of statutory directions 8 issued by Reserve Bank and his own employees. Banker to take all precautions to prevent a fraud or deceit on the part. of customer. These appeals filed against the judgment and order of the Special Court relate to abuse of position by Bank Officers (accused 1, 2, 4 and 5) by unlawfully and dishonestly permitting accused No. 3 to withdraw substantial amounts without having actually received any bankers' cheques. In all there were 10 transactions. The 1 0 accused were also charged with entering into criminal conspiracy. The accused were held guilty by the Special Court and were accordingly convicted and sentenced.

Hence the appeals. Disposing of the appeals, the Court HELD: 1. Condition precedent for holding the accused persons to be guilty of a charge of criminal conspiracy must, therefore, be considered on the anvil of the fact which must be established by the prosecution, viz. , meeting of minds of two or more persons for doing or causing to be done an illegal act or an act by illegal means. The courts, however, while drawing an inference from the materials brought on record to arrive at a finding as to whether the charges of the criminal conspiracy have been proved or not, must always bear in mind that a conspiracy is hatched in secrecy and it is difficult, if not impossible, to obtain direct evidence to establish the same. The ma·nner and circumstances in which the offences have been committed and the accused persons .... took part are relevant.

For the said purpose, it is necessary to prove that the propounders had expressly agreed to it or caused it to be done, and it may also be proved by adduction of circumstantial evidence and/ or by necessary implication. [Para 17] [166-F-H] Mohammad Usman Mohammad Hussain Maniyar & Ors. v. State of Maharashtra (1981) 2 SCC 443; Kehar Singh ... ,.. _ and Ors. v. State (Delhi Administration), 1988 (3) SCC 609; State of Maharashtra v. Som Nath Thapa (1996) 4 SCC 659 and K. R. Purushothaman v. State of Kera/a (2005) 12 SCC 631, relied on. Mohmed Amin @ Amin Choteli Rahim Miyan Shaikh and Anr. v. C. B. I. through its Director, 2008 (14) SCALE 240 and R Venkatkrishnan v. Central Bureau of Investigation (Criminal Appeal No. 76 of 2004 decided by S. C, on 7. 8. 2009, referred to. 2. 1. With respect to the transactions involved in the present case, the ultimate beneficiary was Accused No. 3.

Amount received from different banks by the Andhra Bank were credited to his account as a result whereof the cheques issued by him in favour of third parties could be honoured. But for the said credits made in his account, it would have been overdrawn on a few occasions. The nature of transactions, the manner in which the same had been dealt with, and the fact that some of the officers of the Andhra Bank, employed· in the Funds Department and authorized to get the amounts in question cr~dited to the account of A-3, had facilitated the same although the bankers' cheques in question had in some cases not even been received by the Bank clearly establish the_. factum of conspiracy. [Para 27] [194-E-H; 195-A] ~ ~ 2. 2. An officer of a bank holds a position of trust. Each one of them, keeping in view the nature and extent MIR NAGVI ASKARI v. C. B. I.

of duties required to be performed, is expected to do so + not only in terms of statutory directions, but as also the directions issued· by the Reserve Bank of India and his own employer. Documents for the purpose of giving credit in the account of a customer would indisputably be required to be prepared on the basis of the cheque 8 receipts. It cannot be prepared in anticipation of receipt of a cheque; firstly, because the amount of the cheque, the name of the drawee and other particulars would not be known to them; secondly, the bank is required to maintain a large number of registers to put in place sound banking system. All precautions must be taken to prevent a fraud or deceit on the part of a customer. Therefore, the fact that, credit and debit vouchers were prepared and other registers were filled up, although the cheques were not in physical possession of the bank, i clearly establishes the existence of a criminal conspiracy -..

between the ultimate beneficiary, on the one hand, and some of the officers of the bank, on the other. A debit or credit voucher furthermore is not prepared in piecemeal or in installments. Bank officers are not supposed to know the immediate requirement of an account· holder. [Para 27] [195-8-F] 2. 3. An analysis of the facts of the case clearly demonstrates that a conspiracy had been hatched between the accused 1,2, 3 and 4 its object being that accused Nos. 1, 2 and 4 who were the manager and officers working in the Funds Department and had dominion over the funds of Andhra Bank connived with A3 to prepare credit and debit vouchers authorising the Current Account department to credit tho~ cheques to the account of Accussed No. 3 and, thus, affording him )If to take. pecuniary advantage of the public money of the .. Bank, without some of the cheques in question having even been received by the bank and thus dishonestly #"' / enabling A3 to make. withdrawals from his account + No.

4819 against the said credit afforded to his account. Such things would not have been possible but for meeting of mind amongst the accused involved herein. It is not in dispute that A3 was a broker in securities transaction through the Funds and Investment Department of Fort Branch, Andhra Bank. From these circumstances it is clear that there existed a conspiracy between A1, A2 and A4 the object of which was to obtain undue pecuniary advantage for A3. The said act of the accused had been in violation of the guidelines issued by Andhra Bank. In relation to all the ten transactions in detail this Court has not been able to find any conclusive evidence as regards the involvement of Accused No. 5 in the offence of criminal conspiracy. [Para 27] [195-G-H; 196-A-D] 2. 4.

The conduct of the accused, keeping in view the aforementioned finding of fact, being clear and explicit; the ingredients of conspiracy as enumerated under Section 120A of the Indian Penal Code must be held to have been clearly established only against A 1, A2, A3 and A4. [Para 27] [196-E] C. Chenga Reddy v. State of A. P. , (1996) 10 SCC 193, referred to. 3. The accused in the present case indisputably had dominion over the funds of the bank. They through their acts facilitated misappropriation of the funds to the account of A3. Without the assistance provided by the other accused, the main· accused herein A3 would not · have been able to withdraw from his account amounts of money to which he was not entitled to under law. The accused herein being public servants had an additional responsibility of ensuring that the funds of the public were not misappropriated in any manner or form, what so ever. A3 did not have over draft facility or any overdraft MIR NAGVI ASKARI v. C. RI.

129 limit sanctioned to him. A3 could not have overdrawn his account. He was facilitated to do so by A1, A2 and A4. Since this Court has not been able to fine. adequate evidence of the involvement of A 5 in the transactions, he is acquitted of all charges under the Prevention of Corruption Act. It is, therefore, beyond the purview of any doubt that A1, A2 and A4 being public servants were guilty of offences under s. 13(1)(c) r/w 13(2) as also s. 13(1) (d) r/w 13(2) of the Prevention of Corruption Act. [Para 28] [198-G-H; 199-A-C] 4. 1. A person is said to make a false document or record if he satisfies one of the three conditions under Section 464 IPC provided for under the said section. The first condition being that the document has been falsified with the intention of causing it to be believed that such --f . D document has been made by a person, by whom the person falsifying the document knows that it was not made.

Clearly the documents in question in the present case, even if it be assumed to have been made dishonestly or fraudulently, had not been made with the intention of causing it to be believed that they were made by or under the authority of some one else. The second criteria of the section deals with a case where a person without lawful authority alters a document after it has ~ been made. There has been no allegation of alteration of the voucher in question after they have been made. Therefore in our opinion the second criteria of the said section is also not applicable to the present case. The third and final condition of Section 464 deals with document, signed by a person who due to his mental capacity does not know the contents of the documents which were made i. e because of intoxication or )If unsoundness of mind etc. Such is also not the case here. ;. -. , Indisputably therefore the accused could not have been convicted with the making of a false document.

The Special Judge, therefore, erred in holding that the accused had prepared a false document, which clearly'having regard to the provisions of the law, could not have been done. [Para 29] [201-H; 202-A-F] ":' 4. 2. Further the offence of forgery deals with making of a false document with the specific intentions enumerated in Section 463 IPC. However, since it is already held that the commission of the said offence has not been convincingly established, the accused could not ~ have been convicted for the offence of forgery; The definition of "false document" is a part of the definition ~ of "forgery". Both must be read together. Accordingly, the accused could not have been tried for offence under Section 467 which deals with forgery of valuable securities, will etc. or Section 471, i. e. , using as genuine a forged document or Section 477-A, i. e, falsification of raccounts. The conviction of the accused for the said offences is accordingly set aside.

[Para 29] [202-G-H; 203- > A-DJ Dr. Vim/a v. Delhi Administration, [1963] Supp 2 SCR 585, relied. on. 5. 1. There is no doubt that the offences relating to criminal breach of trust stands established against the accused. They were the officers in the Funds Department _;of Andhra Bank. In the said capacity they had been entrusted with the funds of the Bank. In that sense they had dominion over a thing. The money which was transferred to the account of A3 was the money belonging to the Bank. Only the said accused had the power to transfer it to the account of A3. [Para 30] [206- ' B-C] ~ 5. 2. In the present case, the same has been done ; dishonestly to cause wrongful gain to A3 and in the process wrongful loss has been caused to the Bank. The instruments based on which the funds of Andhra Bank MIR NAGVI ASKARI v. C. 8. 1.

131 were transferred to the account of A3 were not physically available with Andhra Bank at the time the accused persons authorized the transfer of the funds of Andhra Bank to the account of A3. Al also utilized the said credit given and accordingly even cheques issued by him were honoured. Had it not been for the credits given on the 8 relevant dates his account would have been overdrawn. Interest was not charged from A3 and was not debited from his account and loss was therefore caused to the bank. Moreover, it must be noted in this respect that Banking norms and established practices and procedures would contain directions of law prescribing the mode in wbich the trust is to be discharged. The expression direction of law in the context of sections 405 and 409 would include not only legislations pure and simple but also directions, instruments and circuJars 0 issued by an authority entitled therefor. [Para 30] [206-D- H] 5. 3.

The trust in this regard would therefore have to be discharged in terms of such directions. Acting in ,. violation thereof causing wrongful gain to A3 and loss to the Bank would bring the action within Section 409 IPC. Established banking norms are binding on an officer of the Bank in the matter of discharge of the trust i. e. in dealing with the money entrusted to him. He is required to follow the same and that would be an implied term of his contract of service as an officer of the bank. The accused have acted in breach of the same. The prosecution has sufficiently been able to prove the involvement of A1, A2 and A4 as regards the offence of criminal breach of trust. [Para 30] [207-A-C) Onkar Nath Mishra and Ors. vs. State (NCT of Delhi) and Anr. , (2008) 2 SCC 561; K Venkatkrishnan v. Central Bureau r of Investigation (Criminal Appeal 76 of 2004 decided by S. C. on 7. 8. 2009); State of Punjab v. Pritam Chand and Ors. , 2009 (2) SCALE 457 and Sharon Michael and Ors. v.

State of Tamil Nadu and Anr. , 2009 (1) SCALE 627, referred to. 6. 1. Section 410 IPC accordingly defines stolen property. A property is stolen for the purpose of this fsection when its possession is transferred by theft, extortion, robbery, dacoity or criminal breach of trust or which was obtained under misappropriation committed whether in India or outside. An extended meaning is '1-given to the words 'stolen property' which are used in the I four subsequent sections. Not only things which have -' been stolen, extorted or robbed but also things which have been obtained by criminal misappropriation or criminal breach of trust are within the meaning assigned to these words. As has already been noted, Accused A1, A2 and A4 here, were involved in the offence of criminal ~ breach of trust and accordingly the funds which were transferred to the account of A3 falls within the definition of stolen property.

Section 411 provides punishment to the person who dishonestly receives stolen property. The person must have the knowledge that it is a stolen 'r property. One must bear in mind that A3 had entered into a criminal conspiracy with A1, A2 and A4. He would in that respect be deemed to have known that the property in question was stolen property. This section as also the ~ succeeding sections are directed not against the principal offender e. g. a thief, robber or misappropriator but against the class of persons who trade in stolen articles and are receivers of stolen property. Principal offenders are therefore outside the scope of this section. Accordingly the conviction of the principal offender is also not a prerequisite to the conviction of the receiver ~ of stolen property under this section. However in the ' present case the principal offender i. e. A1, A2 and A4 )(. ' have been held guilty of a criminal breach of trust' therefore the convi -- ... MIR NAGVI ASKARI v. C. 8. 1. [S. B.

SINHA, J. ] 161 Tran. Date of Amt. Date of Actual date NO. Credit Credited to realisation of cheque ale of A3 of cheque 1 18. 05. 91 2 crore 20. 05. 91 20. 05. 91 2 05. 07. 91 29 lacs 06. 07. 91 05. 07. 91 3 05. 07. 91 71 lacs 06. 07. 91 05. 07. 91 + 4 17. 09. 91 61,84,925. 59 18. 09. 91 17. 09. 91 5 06. 11. 91 86,62,500 08. 11. 91 06. 11. 91 6 06. 11. 91 75 lacs 08. 11. 91 06. 11. 91 7 13. 11. 91 1,50,00,000 14. 11. 91 13. 11. 91 8 04. 12. 91 7 crores 05. 12. 91 04. 12. 91 9 16. 12. 91 8,80,95,890 17. 12. 91 16. 12. 91 10 07. 04. 92 4 crore 08. 04. 92 07. 04. 92 Accused No. 1 is involved in all the transactions ; Accused No. 2 is said to be involved in eight transactions, i. e. , transaction Nos. 1 to 6, 9 and 1O; while Accused No. 4 is allegedly involved in four transactions, transaction Nos. 4 to 7. Accused Nos. 2 and 4 are jointly involved in transaction Nos. 4 to 7. Accused No. 5 has not authorised any payment. He is said to be involved in transaction Nos. 8 and 9 only.

However, Accused No. 5 has been given benefit of doubt in respect of the 8th transaction. We are, therefore, concerned herein with his involvements in the 8th transaction. We have discussed the functioning of different departments at some length only to highlight the submissions of learned counsel appearing on behalf of the appellants that the prosecution has not been able to prove the charge of conspiracy as without involvement of other departments, it was ~ not possible for accused No. 3 to obtain any pecuniary gain out of the said transactions at all, if any. We must also notice that the functioning of the different departments has not been seriously disputed. The functioning of the Funds Department has been proved by PW 2, Sampada S. Amre, and the other departments' ~ functionings by PW 11, Hemlata Nair. The same would also be apparent from the entries made in the BCR register, marked as Ext. 111.

So far as the functioning of the Clearing Department is concerned, the same has been proved by PW 13, Sunil Pore. Therein, cheques are segregated bank-wise and amount wise. There appears to be some controversy as to at what time cheques are sent out for clearance. According to the appellants, the Funds Department is bound to receive cheques up to 3. 00 ~ p. m. However, according to the prosecution a consolidated statement of the cheques received upto 2. 30 p. m. , after preparing bank schedule by the Clearing Department are sent at about 2. 45 p. m. to the service centre and the R. B. I. Appellants contend that any cheque received after the prescribed hours i. e. 2. 30 - 2. 45 p. m. , is sent with a single voucher to another department. It is accepted by PW 13, Sunil Pore that any cheque -+ received up to 3. 00 p. m. is also entertained wherefor a separate voucher is prepared, and the same is sent to the Current Account Department.

This voucher may not be sent on that date, but must be sent on the day after. It is also contended that in regard to the processing of the cheque for giving credit or making entries, the Funds Department evidently had no access. It is also admitted that ).. the Funds Department personnel have no access to the ALPM ,,, machine. It also appears from the evidence of PW-7, K. Hari Babu, that the crucial function of operating the machine is of ' the Current Account Department. Before signing the document MIR NAGVI ASKARI v. C. B. I. [S. B. SINHA, J. ] relating to the posting of the cheque, an officer of the Current .... Department only would verify the entries made in the computer on the basis of which a print out would be tar -by debiting his account with Rs. 75 lacs as per his statement of account pertaining to the securities transaction. MIR NAGVI ASKARI v. C. 8. 1. [S. B. SINHA, J.

] 183 To the similar effect is the evidence of Kanchan (PW 9) of the Standard Chartered Bank which shows that the cheque for Rs. 86,62,500/- was issued by the ANZ Grindlays Bank in favour of Andhra Bank relating to the transaction of Mr BR Chhada who had purchased five lacs equity shares of HCL limited from A3. The BCR Register in this regard discloses all the requisite details including the cheque number. The voucher made in regard to the said cheque was signed by accused No. 4. The debit voucher was signed by Accused Nos. 1 and 2. We need not go into the details of the said transaction since the learned Special Judge has already given the benefit of doubt to the accused that the said cheques had been received in the funds department on 06. 11. 1991 on the basis of clear enteries made in the BCR Register and the transfer scroll giving the details of the cheque. We do not find any reason to interfere with the said finding.

We agree with the observations of the Special Judge that all the evidence on record would only go on to show that the cheques had in fact been received on the 6. 11. 1991. The next question which arises for our consideration is as to whether the said cheque had been sent for the clearing department on the date of its receipt itself or on 08. 11. 1991. The learned Special Judge in regard to the said question has clearly held that the two cheques were sent to the clearing department on the 8th only and not on the 6th. The learned Special Judge, however, in our opinion, erroneously rejected the argument advanced on behalf of the appellant that the said cheques were sent along with a single voucher but they were returned and therefore were again sent back to the clearing department on 08. 11. 1991. As long as there is the slightest opportunity of two views possible, in our opinion, the one in favour of the accused must be adopted.

All the materials on record were required to be considered ~having regard to the fact that 7. 11. 1991 was a bank holiday and accordingly the credit voucher could only have been sent on the 8. 11. 1991 In our opinion, the learned Special Judge was, with respect, wrong in concluding that even though the two cheques were probably received on 06. 11. 1991, they were not sent for clearing on 06. 11. 1991. In our considered opinion, despite evidence leading to the effect that cheques were received on 06. 11. 1991, the finding to the contrary was clearly erroneous. We are, therefore, of the opinion that the prosecution has not been successful in establishing the involvement of the accused as regards these transactions. SEVENTH TRANSACTION 23. So far as the seventh transaction is concerned, a bankers cheque bearing No. 22687 dated 13. 11. 1991 for a sum of Rs. 2,37,29,750/-was issued by the Standard Chartered Bank in favour of Andhra Bank.

Although a credit voucher for the entire sum should have been prepared, a credit voucher only for asum of Rs. 1. 50 crores authorizing the amount to be credited in the account of Accused No. 3 was prepared. It was --+ signed by Accused No. 4 Ramesh Vardraya Shenoy. The Current Account of the Accused No. 3 was credited on the same day on the basis of the said credit voucher. The said amount was duly credited in his account, as would appear from Exhibit 195. It is not in dispute that the credit of Rs. 1. 50 crores was given on an ad hoc basis. Had such credit not been given, the account of Accused No. 3 would have stood overdrawn,by Rs. 1,39,86,304/-. The amount of difference, viz. , 87,29,750/, "" however, was credited on the next day, i. e. , on 14. 11. 1991. The credit voucher was again signed by Accused No. 4. Indisputably, the said bankers cheque was received on .. ,. . 14. 11. 1991 and sent for clearance on the same day. No interest was charged thereupon.

In the said transaction, bank suffered a loss of Rs. 9,760. 27 by way of interest. A finding of fact has been arrived at by the learn~d Special Judge that the bankers cheque was not in physical possession of the officers of the Andhra Bank on 13. 11. 1991 stating: "58. From this evidence, it clearly appears that the Cheque I Pay Order [Exhibit - 40] was not received in the Andhra Bank on 13. 11. 1991 and the same was not forwarded to the Clearing Department for clearance i. e. for ensuring the credit of that cheque. On 14. 11. 1991 there is entry in the B. C. R. Register of the entire amount of the cheque i. e. Rs. 23729750/-. On that day credit voucher [Exhibit - 78] was --/ prepared for the amount of the difference between the amount of the cheque and the amount of Rs. 1. 5 crores which was credited on 13. 11. 1991 to the account of Hiten P. Dalal. The credit voucher, therefore, is for Rs.

872975/ No adequate or sufficient explanation in regard thereto was furnished by the concerned appellants. Admittedly, there was no entry in the BCR register with regard to the said cheque. There are no details in the Current Account Credit Voucher. It has been submitted by the learned counsel appearing on behalf of the appellants that the cheque was received late on 13. 11. 1991 but was not sent for clearance. It was furthermore submitted that the BCR Register was not exhibited in the evidence. From the records as also the findings of the learned Special Judge, it is evident that the cheque was not received in the Funds Department on 13. 11. 1991. The entry of this cheque finds place as per Exhibit 77 only on 14. 11. 1991. The details of the said transaction shows that the beneficiary thereof ~was the Accused No. 3 and other details have also been mentioned therein.

The credit voucher, according to Hemlata Nair (PW-11) was sent to the Current Account Department under the signature of the Accused No. 4. Ordinarily, it should have contained the details, but, as noticed hereinbefore, it was only for a sum of Rs. 1. 50 crores. A debit voucher (Exhibit 75) was issued wherein it was stated: ~ "To receive 1. 50 crores cheque, but received cheque for Rs. 23929750 - erroneously not presented in the clearing. Presented on 14. 11. 1991. " Mention of both the credit and debit vouchers finds place in Scroll Register (Exhibits 76(1) and 76(2)). The Transfer Scroll entries (Exhibits 76(3) and 76(4)) also show that the credit as )against the cheque at Exhibit 40, that was given to the account of Accused No. 3, was only Rs. 1. 50 crates although the cheque was for a sum of Rs. 2,37,29,750. Although the cheque was not sent to the clearing department for clearance on 13. 11.

1991, a pay order/ cheque (Exhibit 82) was issued in favour of Standard Chartered Bank for and on behalf of Accused No. 3 upon debiting ·the amount mentioned therein. In the aforementioned state of affair, the learned Special Judge rightly arrived at the conclusion that. the cheque might not have been in the physical possession of Andhra Bank on 13. 11. 1991. Even Sunil Pore (PW-13) in his evidence categorically stated that the consolidated credit voucher was received from the Funds Department on 13. 11. 1991 (Exhibit 128) in terms whereof 14 instruments had been received from the Funds Department. The bank schedule which was marked as Exhibit 159 showed that the total amount of the said transaction tallied with the consolidated credit voucher (Exhibit 128). However, the bank schedule also did not include the amount of the cheque I pay order of the Standard Chartered Bank. It is difficult to conceive that such a transaction could be cleared by the Accused bonafide.

It was evidently done with an object of giving an ad hoc credit of Rs. 1. 50 crores to Accused No. 3 which he must have badly needed on 13. 11. 1991. Otherwise, as it would appear not only from the evidence of Ms. Hemlata Nair (PW-11) but also from that of Mr. Ramteke (PW- 18), that his account would have been overdrawn on that day by Rs. 1,39,86,304. 44. Mr. Bhalla (PW-23) in his evidence stated that no reference in relation to the transaction was made to him. Mr. Sastry (PW-22) also in his evidence categorically stated that the amount was overdrawn, and therefore,· it attracted levy of interest. The debit voucher dated 13-11-1991 is for 1. 5 crores and is signed by both A-1 and A-4. It is not difficult to infer that A1 has also played an equally active role in ensuring an ad-hoc credit of Rs. 1. 5 Crore into the Account of Accused No. 3. In her evidence, Ms. Hemlatha Nair has identified the signature of A1 in the debit voucher (Ext. - 75).

Therefore, it is not difficult to perceive that A-1 is involved in this transaction. The learned counsel for the appellant would contend that the error was an inadvertent one and as the said error was detected, it was re-submitted on the next day. We do not think that the said explanation is sufficient. We, therefore, are of the opinion that the involvement of the concerned appellants - Accused No. 3 and 4 is established beyond any doubt with regard to the said transaction. EIGHTH TRANSACTION 24. The Eighth transaction pertains to Cheque No. 193889 dated 04-12-1991 for Rs. 7 Crore issued by Bank of Karad, Fort Branch, Bombay. [Ext. 32] PW2, Ms. Sampada Ambre, who was working in Bank of Karad during the time of the transaction, in her evidence, affirms that she had prepared the said Cheque and that was signed by PW-5, Mr. Sarmalkar. It is being claimed on behalf of the Petitioners that the said Cheque was received by Andhra Bank on 04-12-1991.

A perusal of the record reveals that the Cheque was dated ..... 04-12-)991. The amount for the same was credited to the Account of Accused on 04-12-1991 but the Cheque was presented for clearing only on 05-12-1991. However the irregularities in the records should have been subjected to close scrutiny to determine collusion, if any, between the Accused persons for the purpose of serving a common object. In her deposition, Mrs. Hemalatha Nair, (PW-11) Clerk, Funds Department of Andhra Bank, Fort Branch, states that she had prepared the Credit Voucher [Ext. 85] dated 04-12- 1991 for R$. 7 Crore favoring C. D. No. 4819 and the Debit Voucher [E}(t. 86] dated 04-12-1991 for the same amount on 'D being instructed by her officer. Curiously, both the entries only mention of a Cheque received from Bank of Karad, without any reference to its number or date. She also deposed that the vouchers were scrolled at Serl. No. 12 on Pg. No.

90 of the Transfer Scroll Register [Ext 88(1) and (2)] and authorized by Accused No. 1. As per Katta Hari Babu [PW-17], on the basis of the same credit voucher, he credited to the account of Accused No. 3, an amount of Rs. 7 crores. The same is corroborated by his Statement of Account of the same date. [Ext. 195 (11)] However, according to Mr.. Sunii Pore, PW-13, in the Bank Statement dated 04-12-1991, no entry of the said Cheque may be found. Similarly, a perusal of the Cheque Clearance Register of Andhra Bank Dt. 04-12-1991 also reveals that there is no mention of the Cheque issued by Bank of Karad in it. Further in her deposition, Ms. Hemalatha Nair, (PW-11) states that the said Cheque was received by Andhra Bank only on 05-12-1991 and that at Pg. 122 of the BCR Register, dated 05-12-1991, an entry with all the details of the said Cheque was MIR NAGVI ASKARI v. C. B. I. [S. S. SINHA, J.

] 189 made: + As per her evidence, on 05-12-1991, the consolidated Credit Voucher which included the Cheque amount of 7 Crores was prepared by Shailendra Rane and was sent to the Clearing Dept. for clearing. The BCR Regi$ter, dt. 05-12-1991, which 8 tallied with the Consolidated Credit Voucher prepared by Sri. Shailendra Rane on the same day, was initialled by Accused No. 2. She deposed further that on 05-12-1991, as per the instructions of accused No. 2 and 5, she prepared the BCR Debit Voucher which does not include the Cheque amount of Rs. 7 Crore. She identified the handwriting, signatures and initials of herself, Accused No. 1, 2 and 5. Had the said credit been not given, the account of the Accused No. 3 would have been overdrawn by Rs. 3,01,92,461. 90. No interest was charged as a result whereof the bank suffered a loss of Rs. 45,547. 90. Thus, it is evident that the amount of the cheque was credited to the account of Accused No.

3 on 04-12-1991, even without having the same in the possession of the bank. It is also clear from the perusal of the records that certain irregularities are present in the records pertaining to the cheque which, undoubtedly involved Accused No. 1 and 2. We are, thus, of the opinion that Accused No. 1 and 2 have undoubtedly assisted in ensuring the credit of Rs. 7 Crore in the account of Accused 3. The allegation against Accused No. 5 is only regarding signing by him the Consolidated Debit Voucher for a lesser amount even when it was not tallying with the total amount of the cheques recorded in the BCR Register on 05-12-1991. Accused No. 5, contended that he had done so because the amounts were not tallying with and was less by seven Crores. His further contention was that the Consolidated Credit Voucher was prepared by Ms. Hemalatha Nair and put up to --+ him for his signature, and he signed it keeping with the ..

, requirements of double entry system and to avoid double debit as the same had already been debited on 04-12-1991. We may also notice that accused No. 5 was acquitted by the Trial Court in respect of transaction dt. 16-12-1991 despite the Consolidated Debit Voucher not tallying with the total as ~ reflected in the BCR Register. Thus, being only involved in these two transactions having similar facts, and being acquitted in one, he is, in our view, entitled to the same benefit in the other transaction too. Benefit of doubt given in respect of one transaction would apply on all fours to the other, as both of them are of similar nature. Further, it also needs to be considered that the prosecution has not been able to produce any evidence ~ to prove Accused no. S's involvement in the conspiracy. Therefore we are of the opinion that the learned Special Judge erred in holding that accused no. 5 was a party to the conspiracy with regard to the instant transaction. .... NINTH TRANSACTION 25.

It related to a bankers cheque bearing No. 231381 dated 16. 12. 1991 for a sum of Rs. 8,80,95,890. 41 drawn on the Standard Chartered Bank in favour of Andhra Bank. The ~ entry in BCR Register of 16-12-1991 (Ext. 91) has an entry with full details of the said cheque including the cheque number and the date. However, the beneficiary is shown as "Current Account ABFS" instead of Accused No. 3. A credit voucher was prepared for the aforementioned sum which was signed by Accused Nos. 1 and 2. Accused No. 3's account was credited on 16. 12. 1991. The banker's cheque, however, was received in the Clearing Department on 17. 12. 1991 and sent for clearing ~ on that day. Had the credit of Rs. 8,80,95,890. 41 not been given, the Accused Nos. 3's account would have been overdrawn by Rs. 3,88,54,765. 49. The evidence brought on record clearly indicate that the cheque was received on 16. 12. 1991. It is possible that the cheque was received late and the same was sent with a single credit voucher.

As the Clearing Department refused to accept the same, it was once again sent to the Clearing Department with the consolidated voucher (Exhibit 122) on 17. 12. 1991. The ! earned Special Judge opined that if the cheque was received on 16. 12. 1991, the same should have been sent to the Clearing Department for clearance on the same day and as such the learned Judge has inferred that the cheque must have not been received before 3. 00 p. m. Had the credit voucher been returned, as has been contended, it was obligatory on the part of the concerned appellants to intimate the Current Account Department so as to enable them to, through posting of the credit voucher give credit to the account of the Accused No. 3. It was evidently not done. In the said transaction, loss of interest to the bank was for Rs. 57,324.

The learned trial judge has rejected the contention of the accused that the cheque was received late and it was sent to the clearing department with a single credit voucher and since ,_ the clearing department refused to accept the same, it was once again sent to the clearing department with a consolidated credit voucher (Ext. - 122) on 17-12-1991 on the grounds that even if it was true, it was the duty of the accused No. 1 and Accused No. 2 to immediately intimate the Current Accounts department to withhold posting of the credit voucher for giving credit in the Accused 3's account. In relation to this transaction also, it appears to us that the learned Special Judge failed to consider the practice of "Clear'' and "UncleQr Credit" to which we have already made reference hereinbefore and for the sake of brevity, we restrain ourselves from elaborating thereon once again. A; ,. ,..

However, we are constrained to mention that is difficult to accept that a mere failure to intimate the current accounts 192 SUPR. EME COURT REPORTS [2009] 13 (ADDL. ) S. C. R. department to withhold posting when there existed a ~ mechanism of clear and unclear credits, would be sufficient to establish conspiracy. We do not, therefore, agree with the learned special judge's finding with respect to this transaction also and, therefore, of the opinion that benefit of doubt should be given to all the accused herein. TENTH TRANSACTION ~ 26. The tenth transaction related to a banker's cheque bearing No. 102956 dated 7. 04. 1992 for a sum of Rs. 4. 00 crore drawn on Bank of Karad Ltd. in favour of Andhra Bank. The credit voucher was prepared for the aforementioned sum which was signed by the Accused No. 2. Accused No. 3's account was credited on 7. 04. 1992. The bankers cheque was received on 8. 04. 1992 in the Clearing Department and was sent for clearing on the same day. Had credit of Rs.

4. 00 crore not be~n given, Accused No. 3's account would have been overdrawn by Rs. 2,77,95,280. 95. Loss to the bank on account of interest was Rs. 26,027. The finding arrived at by the learned Special Judge is that the cheque was issued on 8. 4. 1992. It appears that on the day on which the cheque was issued, there was no sufficient balance in the account of Shri AD. Narottam. His account was debited only on 8. 4. 1992. The evidence of Mr. Raje (PW-3) is that he had signed the cheque on 7. 4. 1992. He also signed the forwarding letter (which was marked as Exhibit 17) on the same day. Credit voucher was, however, prepared by Sudhakar Ali (PW-4) on 8. 4. 1992. It is not in dispute that this transaction pertained to purchase of securities from Andhra Bank for Mr. AD. Narottam, who was a share broker. As would appear from the evidence ~ of Sudhakar Ali (PW-4), an inter-bank credit voucher was prepared on the same day on which the cheque was issued. In his evidence, Mr.

Sarmalkar (PW-5) also stated that as Mr. Narottam did not have sufficient amount in his credit, the cheque as also the forwarding letter was actually issued on 8. 4. 1992 although they were bearing· the date 7. 4. 1992. The BCR Register (Exhibit 105) also did not show that there was any entry in regard to the said cheque on 7. 4. 1992. No such entry is found even on 8. 04. 1992. The rubber stamp of Clearing Department, however, showed the date to be "' 8. 04. 1992. The corresponding debit voucher (Exhibit 98) also provides the details of the said cheque. The credit voucher (Exhibit 100) on the basis whereof the said sum of Rs. 4. 00 crores was credited to the account of Accused No. 3 on 7. 04. 1992, however, did not mention the other details of the cheque of Bank of Karad. It mentioned the name of the bank as Standard Chartered Bank which is evidently not correct. The --{ said credit voucher was signed by Accused No. 2.

Therefore, the basis on which the credit voucher was prepared on 7. 04. 1992 has not been explained. Contention of the appellant that in the credit voucher, the "-· name of the bank was wrongly mentioned as the Standard Chartered Bank in stead and place of Bank of Karad cannot be accepted. Even the BCR Register does not show that a cheque for the aforementioned amount has been received. The ~ bank schedule dated 7. 04. 1992 also does not indicate receipt of such a cheque from either of the said banks on 7. 04. 1992. The consolidated credit voucher also does not bear any entry. It, therefore, appears that the said credit voucher was wrongly prepared for a sum of Rs. 4. 00 crores mentioning the name of the drawer bank as Standard Chartered Bank. False entry was also made in the Transfer Scroll (Exhibit 102) showing the name of the drawer bank as Reserve Bank of India. Even in the BCR Register of 8. 04. 1992, no entry is found as regards the said • cheque (Exhibit 12).

The amount of the said cheque was, however, included in the consolidated voucherdated 8. 04. 1992 (exhibit 106) which was sent to the Clearing Department. The bank schedule dated 8. 04. 1992 also shows the receipt of the -t cheque which was forwarded for clearance on the same day. It is, therefore, evident that the concerned accused were not aware about exactly where the money came from. It is wholly unlikely that the experienced bank officers would make such a glaring mistake with regard to the name of the bank as credit vouchers and debit vouchers are prepared only on the basis of the cheque as also the forwarding letter. Katta Hari Babu (PW-17) in his deposition stated that had the said amount not been credited, Accused No. 3's account would have been overdrawn by the amount of Rs. 2,77,95,280. 95. Thus, it is evident that Accused 2 prepared the credit vouch_er dated 07-04-1992 [Ext.

-100] for the purpose of giving 'r credit to the account of Accused 3 for the furtherance of the objectives of the conspiracy between them. APPLICATION OF THE PRINCIPLES OF CRIMINAL CONSPIRACY ··' 27. Applying the said principles to the facts and circumstances of the present case it must be held that with respect to the transactions involved in the present case, the ultimate beneficiary was Hiten P. Dalal (Accused No. 3). Amount received from different banks by the Andhra Bank were credited to his account as a result whereof the cheques issued by him in favour of third parties could be honoured. But for the said credits made in his account, it would have been overdrawn on a few occasions. The nature of transactions, the manner in which the same had been dealt with, and the fact that some of the officers of ;A the Andhra Bank, employed in the Funds Department and authorized to get the amounts in question credited to the account of Hiten P.

Dalal, had facilitated the same although the bankers' cheques in question had in some cases not even been .... received by the Bank clearly establish the factum of conspiracy. An officer of a bank holds a position of trust. Each one of them, keeping in view the nature and extent of duties required to b. e performed, is expected to do so not only in terms of statutory directions, but as also the directions issued by the Reserve Bank of India and his own employer. Documents for the purpose of giving credit in the account of a customer would indisputably be required to be prepared on the basis of the "' cheque receipts. It cannot be prepared in anticipation of receipt of a cheque; firstly, because the amount of the cheque, the name of the drawee and other particulars would not be known to them; secondly, the bank is required to maintain a large number of registers to put in place a sound banking system.

_, All precautions must be taken to prevent a fraud or deceit on the part of a customer. Therefore, the fact that, credit and debit vouchers were prepared and other registers were filled up, although the cheques were not in physical possession of the bank, in our .... ,,,. opinion, clearly establishes the existence of a criminal conspiracy between the ultimate beneficiary, on the one hand, and some of the officers of the bank, on the other. ~ A debit or credit voucher furthermore is not prepared in piecemeal or in instalments. Bank officers are not supposed to know the immediate requirement of an account holder. An analysis of the facts of the case clearly demonstrates that a conspiracy had been hatched between the accused 1,2, 3 and 4 its object being that accused Nos.

1, 2 and 4 who were the manager and officers working in the Funds Department and had dominion over the funds of Andhra Bank connived with A3 to prepare credit and debit vouchers authorising the Current • Account department to credit those cheques to the account of Accussed No. 3 and, thus, affording him to take pecuniary advantage of the public money of the Bank, without some of ~ the cheques in question having even been received by the bank and thus dishonestly enabling A3 to make withdrawals from his account No. 4819 against the said credit afforded to his account. Such things would not have been possible but for meeting of mind amongst the accused involved herein. It is not in dispute that A3 was a broker in securities transaction through the Funds and Investment Department of ~ Fort Branch, Andhra Bank. From these circumstances it is clear that there existed a conspiracy between A1, A2 and A4 the object of which was to obtain undue pecuniary advantage for A3.

The said act of the accused had been in violation of the ~ guidelines issued by Andhra Bank. As we have noted hereinbefore on a thorough discussion, in relation to all the ten'transactions in detail we have not been able to find any conclusive evidence as regards the " involvement of Accused No. 5 in the offence of criminal conspiracy. ..... The conduct of the accused, keeping in view the aforementioned finding of fact, being clear and expricit; in our opinion, the ingredients of conspiracy as enumerated under Section 120A of the Indian Penal Code must be held to have been clearly established only against A 1, A2, A3 and A4. ~ PREVENTION OF CORRUPTION ACT 28. Further A1, A2, A4 and AS have also been charged and convicted for the offence under s. 13(1)(c) and s. 13 (1) (d) of the Prevention of Corruption Act by the special court below. It is undisputed that accused No. 1 was working as Manager and others accused as· officer in the Funds Department of the Fort Branch.

Andhra Bank is a Nationalised • Bank and, therefore, they are 'Public servants' within the -, meaning of section 21 of the IPC. MIR NAGVI ASKARI v. C. 8. 1. [S. S. SINHA, J. ] 197 The Accused, particularly A 1 and A2 had dominion over 1'the funds of the Bank, and they misappropriated the funds of Andhra Bank by issuing credit vouchers to the current account ( department for getting the amounts credited to the account of A3, in some cases when the cheques were not received or sent for clearance. 8 Prevention of Corruption Act, 1988 replaced the prevention of Corruption Act, 1947. The new Act was enacted 'to f consolidate and amend the law relating to the prevention of corruption and for matters connected there with. Relevant portions of S. 13 which provide for Criminal Misconduct by a public servant read as under: "13. Criminal misconduct by a public servant. (1) A public servant is said to commit the off~ce of criminal misconduct, - Co [...

] (c) If he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do; or (d) If he,-[... ] (ii) By abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or [ ... ](2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not -less than one year but which may ~ extend to seven years and shall also be liable to fine. " Section 13 in general lays down that if a public servant obtain for himself or for any other person, any valuable thing or pecuniary advantage he would be guilty of criminal misconduct ~ and sub-section (2) thereof prescribes of the punishment for such misconduct.

~ The ingredients of clause (c) of the said section are that the public servant must dishonestly or fraudulently misappropriate or otherwise convert to his own use or allow any other person to misappropriate or otherwise convert for his own use any property. Such property must have been entrusted to ~ such public servant or must be in the alternative under his control as a public servant. Further such conversion or misappropriation must be done with a dishonest or fraudulent intention. If the said three conditions have been satisfied then the public servant would be guilty of an offence under clause (c) of the section 13(1). That is to say that if there is a dishonest or fraudulent intention on the part of a public servant and he with that intention misappropriates or otherwise converts for his own use or allows any one else to misappropriate or otherwise convert for his own use, any property which has been entrusted to him or is under his con. trol as a public servant.

Further clause (d) of the said section of which the accused herein have also been charged deals with a similar kind of a situation. The public servant must in this case by abusing his position as a public servant, obtain for himself or for any other person any valuable thing or pecuniary advantage to be liable for criminal misconduct under the section. The accused in the present case indisputably had dominion over the funds of the bank. They through their acts facilitated misappropriation of the funds to the account of A3. Without the assistance provided by the other accused, the main accused herein A3 would not have been able to withdraw from his account amounts of money to which he was not entitled to under law. The accused herein being public servants had an additional responsibility of ensuring that the funds of the public were not misappropriated in any manner or form, what so ever. A3 did not have over draft facility or any overdraft limit sanctioned to him.

A3 could not have overdrawn his account he was facilitated to do s. o by A1, A2 and A4. Since we have not been able to find adequate evidence of the involvement of A 5 in the transactions we hereby acquit 8 him of all charges under the Prevention of Corruption Act. It is, therefore, beyond the purview of any doubt that A1, A2 ar:id A4 being public servants were guilty of offences under s. 13(1)(c) r/w 13(2) as also s. 13(1) (d) r/w 13(2) of the said M OFFENCES RELATING TO MAKING OF FALSE DOCUMENTS 29. The learned special judge has also charged all the 0 accused A1, A2 , A4 and AS for offences under s. 467, 471 and 477 A of the IPC. S. 467 deals with the forgery of valuable securities and wills etc. and is reproduced below: "467. Forgery of valuable security, will, etc.

-Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, moveable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any moveable property or valuable security, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. " Section 471 which deals with using as genuine a forged document has been reproduced below: "471.

Using as genuine a forged document or electronic record-Whoever fraudulently or dishonestly uses as ~ genuine any document or electronic record which he knows or has reason to believe to be a forged document or electronic record, shall be punished in the same manner as if he had forged such document or electronic record. " Section 477 A reads as under: "477A. Falsification ofaccounts. -Whoever, being a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant, willfully, and with intent to defraud, destroys, alters, mutilates or falsifies any book, electronic record, paper, writi~].

valuable security or account which belongs to or is in the possession of his employer, or has been received by him for or on behalf of his employer, or willfully, and with intent to defraud, makes or abets the making of any false entry in, or omits or alters or abets the omission or alteration of any material particular of any material particular form or in, any such book, electronic record, paper, writing], valuable security or account, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with _both. Explanation-It shall be-sufficient in any charge under this section to allege a general intent to defraud without naming any particular person intended to be defraud without naming any particular person intended to be defrauded or specifying any particular sum of money intended to be the subject of the fraud, or any particular day on which the offence was committed.

" These three offences deal with substantially what is known as forgery, defined in Section 463 or making of a false '* document which is provided under Section 464. It is reproduced heretobelow: MIR NAGVI ASKARI v. C. 8. 1. [S. B. SINHA, J. ] 201 "Section 464.

Making a false document-A person is said to make a false document or false electronic record- First-Who dishonestly or fraudulently- (a) Makes, signs, seals or executes a document or part of a document; (b) Makes or transmits any electronic record or part of any electronic record; (c) Affixes any digital signature on any electronic record; (d) Makes any mark denoting the execution of a document or the authenticity of the digital signature, With the intention of causing it to be believed that such document or part of document, electronic record or digital signature was made, signed, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed; or Secondly- Who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with digital signature either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly- Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his digital signature on any electronic record kn~wing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know ~ the contents of the document or electronic record or the nature of the alterations.

[... ]" A person is said to make a false document or record if he satisfies one of the three conditions as noticed hereinbefore ~ and provided for under the said section. The first condition being that the document has been falsified with the intention of causing it to be believed that such document has been made by a person, by whom the person falsifying the document knows that it was not made. Clearly the documents in question in the present case, even if it be assumed to have been made dishonestly or fraudulently, had not been made with the intention of causing it to be believed that they were made by or under .. the authority of some one else. The second criteria of the section deals with a case where a person without lawful authority alters a document after it has been made. There has been no allegation of alteration of the voucher in question after they have been made. Therefore in our opinion the second criteria of the said section is also not applicable to the present case.

The third and final condition of Section 464 deals with a document, signed by a person who due to his mental capacity does not know the contents of the documents which were made i. e because of intoxication or unsoundness of mind etc. Such is also not the case before us. Indisputably therefore the accused before us could not have been convicted with the making of a false document. The learned Special Judge, therefore, in our opinion, erred in holding that the accused had prepared a false document, which clearly, having regard to the provisions of the law, could not have been done. Further the offence of forgery deals with making of a false document with the specific intentions enumerated therein. The said section has been reproduced below. ,. _ "463. Forgery. -Whoever makes any false documents or electronic record part of a document or electronic record with, intent to cause damage or injury), to the public or to MIR NAGVI ASKARI v. C. 8. 1. [S. B. SINHA, J.

] 203 any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery. " However, since we have already held that the commission of the said offence has not been convincingly established, the accused could not have been convicted for the offence of forgery. The definition of "false document" is a part of the definition of "forgery". Both must be read together. [Or. Vim/a v. Delhi Administration, [1963] Supp 2 SCR 585] Accordingly, the accused could not have been tried for offence under Section 467 which deals with forgery of valuable securities, will etc. or Section 471, i. e. , using as genuine a forged document or Section 477-A, i. e, falsification of accounts. -1 The conviction of the accused for the said offences is accordingly set aside. -CRIMINAL BREACH OF TRUST 30.

The next charge we shall deal with is one arising under Section 409 of the ! PC with which the accused herein have also been convicted of by the special judge. The punishment for criminal breach of trust by a public servant is provided under Section 409. However we must herein make reference of + definition of criminal breach of trust simplicitor which reads as under Section 405: "405. Criminal breach of trust. -Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or Of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits 'criminal breach of trust'. " The punishment for criminal breach of trust is provided in Section""" 406.

Punishment for aggravated forms of criminal -.... breach of trust is provided in Section 407 to Section 409. The terms of the section are very wide. It applies to one who is in any manner entrusted with property or dominion over 8 property. The section does not require that the trust should be in furtherance of any lawful object. The section provides inter alia, that if such a person dishonestly misappropriates or converts to his own use property entrusted to him he commits criminal breach of trust. There are separate offences by which criminal breach of trust may be committed. This section requires (1) Entrusting any person with property or with dominion over property.

(2) That person entrusted (a) dishonestly misappropriates or converting to his own use that property; or (b) dishonestly using or disposing of that property or willfully suffering any other person so to do in violation - (i) of any direction of law prescribing the mode in which ~uch trust is to be discharged, or (ii) of any legal contract made touching the discharge of such trust. In Onkar Nath Mishra and Ors. vs. State (NCT of Delhi) and Anr. , [(2008) 2 sec 561] this court noted that in the commission of the offence of criminal breach of trust, two distinct parts are involved. The first consists of the creation of an obligation in relation to the property over which dominion or control is acquired by the accused. The second is misappropriation or dealing with the property dishonestly and contrary to the terms of the obligation created. Criminal breach of trust by a public servant has been dealt I with under Section 409 which reads as under: ~ "409.

Criminal breach of trust by public servant, or by banker, merchant or agent. -Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits breach of trust in respect of that property, shall be punished with 1[imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. " Since we have dealt with the said issue in detail in K Venkatkrishnan v. Central Bureau of Investigation (Criminal Appeal 76 of 2004 decided today), we need not deal with it here again. -1 However, it is important to mention here that more recently this court in State of Punjab v. Pritam Chand and Ors.

, 2009 (2) SCALE 457 opined: "The ingredients of offence under Section 405 are (i) ) entrusting any person with property or with dominion over the property, (ii) the person entrusted (a) dishonestly misappropriated or converted to his own use the property or (b) dishonestly used or disposed of the property or willfully suffered any other person so to do in violation (i) of any direction of law prescribing mode in which such mode is to be discharged or (ii) of any legal contract made touching the discharge of trust. " Further, more the court in Sharon Michael and Ors. v. State of Tamil Nadu and Anr. , 2009 (1) SCALE 627 noted thus: "Ingredients of Section 409 of IPC read as under: 'i- (i) The accused must be a public servant; (ii) He must have been entrusted, in such capacity, with - " property. i (iii) He must have committed breach of trust in respect of such property.

" "' Therefore, in view of the principles of law extracted above in our opinion there is no doubt that the offences relating to criminal breach of trust stands established against the accused. They were the officers in the Funds Department of Andhra Bank. In the said capacity they had been entrusted with the funds of the Bank. ! n that sense they had dominion over a thing. The money which was transferred to the account of A3 was the money belonging to the Bank. Only the said accused had the power to transfer it to the account of A3. In the present case, the same has been done dishonestly to cause wrongful gain to A3 and in the process wrongful loss ... has been caused to the Bank. The instruments based on which the funds of Andhra Bank were transferred to the account of A3 were not physically available with Andhra Bank at the time the accused persons authorized the transfer of the funds of Andhra Bank to the account of A3.

A3 also utilized the said credit given and accordingly even cheques issued by him were honoured. Had it not been for the credits given on the relevant dates his account would have been + overdrawn. Interest was not charged from A3 and was not debited from his account and loss was therefore caused to the bank. Moreover, it must be noted in this respect that Banking norms and est. ablished practices and procedures would contain directions of law prescribing the mode in which the trust is to be discharged. The expression direction of law in the context of sections 405 and 409 would include not only legislations pure _.. ,... and simple but also directions, instruments and circulars issued by an authority entitled therefor. - MIR NAGVI ASKARI v. C. B. I. [S. S. SINHA, J. ] 207 The trust in this regard would therefore have to be discharged in terms of such directions. Acting in violation thereof causing wrongful gain to A3 and loss to the Bank would bring the action within Section 409 IPC.

Established banking norms are binding on an officer of the 8 Bank in the matter of discharge of the trust i. e. in dealing with the money entrusted to him. He is required to follow the same and that would be an impHed term of his contract of service as an officer of the bank. The accused before us here acted in breach of the same. We are therefore of the opinion that the prosecution has sufficiently been able to prove the involvement of A1, A2 and A4 as regards the offence of criminal breach of trust. i OFFENCE RELATING TO RECEIVING STOLEN PROPERTY 31. The main accused herein, Hiten P Dalal, has in addition also been convicted u/s 411 which deals with dishonestly receiving stolen property. The said section has been reproduced below: "411. Dishonestly receiving stolen property..... :..

Whoever dishonestly receives or retains any stolen property, knowing or having reason to believe the same to be ~tolen property, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both. Stolen property as used in this section has been defined in section Section 41 O: "410. Stolen Property-Property, the possession whereof has been transferred by theft, or by extortion, or by robbery, and property which has been criminally misappropriated or in respect of which criminal breach of trust has been committed, is designed as "stolen property", whether the transfer has been made, or the misappropriation or breach i of trust has been committed, within or without India. But, if such property subsequently comes into the possession of a person legally entitled to the possession thereof, it then ceases to be stolen property. " Section 410 accordingly defines stolen property.

A property is stolen for the purpose of this section when its possession is transferred by theft, extortion, robbery, dacoity or criminal ~ breach of trust or which was obtained under misappropriation committed whether in India or outside. An extended meaning is given to the words 'stolen property' which are used in the four subsequent sections. Not only things which have been stolen, extorted or robbed but also things which have been obtained by criminal misappropriation ~ or criminal breach of trust are within the meaning assigned to these words. We will not delve into this matter in detail because, as has already been noted, Accused A1, A2 and A4 here, were involved in the offence of criminal breach of trust and accordingly the funds which were transferred to the account of A3 falls within the definition of stolen property. Section 411 provides punishment to the person who dishonestly receives stolen property. The person must have the knowledge that it is a stolen property.

We must bear in mind that A3 had entered into a criminal conspiracy with A1, A2 and A4. He would in that respect be deemed to have known that the property in question was stolen property. This section as also the succeeding sections are directed not against the principal offender e. g. a thief, robber or misappropriator but against the class of persons who trade in stolen articles and are receivers of stolen property. Principal offenders are therefore outside the scope of this section. Accordingly the conviction of the principal offender is also not a prerequisite to the conviction of the receiver of stolen property under this section. However in the present case the principal offender i. e. A1, A2 and A4 have been held guilty of a 'criminal breach of trust' therefore the conviction of A3 would be even more clearly established from the facts and circumstances of the present case.

, It must be noted in this respect that this section requires two essentials: (a) Dishonest receipt or retention of stolen property. (b) Knowledge or reason to believe at the time of receipt that the property was obtained in the ways specified in the section .. The offence of dishonest retention of property is almost contemporaneous with the offence of dishonestly receiving stolen property. A person who dishonestly receives property and retains it, must obviously continue to retain it. ~ It is the duty of the prosecution in order to bring home the guilt of a person under Section 411 to prove: (1) that the stolen property was in the possession of the ... accused. (2) That some person other than the accused had possession of the property before the accused got possession of it and (3) That the accused had knowledge that the property was stolen.

'j- It has therefore in our opinion been conclusively established by the prosecution that the A3 was guilty of an offence under Section 411, since he had dishonestly received stolen property. of SENTENCING AND CONCLUSION . 32. We may also place on record that as the CBI has not preferred any appeal against the quantum of sentence, this Court cannot impose a higher sentence. Since we have acquitted accused No. 5 Mir Nagvi Askari of all the charges against him the order of sentence passed ·~ against him is hereby quashed. Since we have acquitted all the accused of offences under Section 467 read with Sections 120, 471 read with Section 1208 as well as section 477A read with 120-B of the Indian Penal Code, the sentence passed by the learned Special Judge against all the accused as regards the said offences is .. hereby quashed. The Main accused herein A 3, Hiten P Dalal has been found guilty of offences punishable under Section 1208 and 411 read with Section 1208.

He is hereby sentenced to suffer rigorous imprisonment for 6 months and to pay a fine of Rs. 50,000 and in default to suffer Rigorous imprisonment for one month. So far as the sentence for the offences punishable under .. s. 409 r/w section 109 of the Indian Penal Code and Section 13 (1) (c) and Section 13(1 )(d) read with 13(2) of the Prevention of Corruption Act read with Section 109 of the Indian Penal code is concerned, we agree with the conclusion arrived at by the learned Judge that no special sentence needs be passed against him in this respect. We affirm the sentence imposed by the learned Special Judge with regard to the offence under the Prevention of ~ Corruption Act. Accused 1, Rachakonda Dhankumar, Accused 2, Suratkal MIR NAGVI ASKARI v. C. 8. 1. [S. 8. SINHA, J. ] 211 Kamat, and Accused 4 Ramesh Vardaya Shenoy are -t sentenced to suffer RI for one month each and to pay Rs.

1000/ - in fine and in default to suffer RI for seven days each for the offences punishable under Section 13(1 )(c) read with Section 13(2) of the Prevention of Corruption Act read with Section 120- 8 of the IPC. 8 Similarly, the accused are also sentenced to suffer RI for one month and to pay a fine of Rs. 1000/- each in default to ~ suffer RI for seven days each for offences punishable under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act read with Section 1208 of the IPC. ' Further Accused 1, Rachakonda Dhankumar, Accused 2, Suratkal Kamat, and Accused 4 Ramesh Vardaya Shenoy are sentenced to suffer RI for 6 months each and to pay fine of Rs. 5000/- each , and in default to suffer RI for one month each for offences punishable under Section 1208 and Section 409 read with Section 1208 of the IPC. All substantive sentences are directed to run concurrently. ~.

Each accused should be given the benefit of set off for the period for which he has already undergone imprisonment in this case. So far as the payment of fine is concerned, a period of 2 months time is given to all accused persons, to deposit the same. G. N. Appeals disposed of.