Date of judgment:
13th December, 2021
Bench:
Hon’ble Chief Justice NV Ramana
Justice Hima Kohli
Justice Surya Kant
Parties:
Appellant – N.Raghavendr
Respondent – State of Andhra Pradesh, CBI
Subject
The appellant was charged under section 420, 409 and 477A IPC and 13(2) r/w 13(1)(c) of the PC Act for issuing premature FDR’s. He approached the Hon’ble Supreme Court but it resulted in dismissal of his appeal.
Legal Provisions
- Section 409 IPC- Breach of criminal trust
- Section 420 IPC- cheating regarding delivery of property
- Section 477A IPC- Falsification of accounts
- Section 13(2) PC Act- Punishment for criminal misconduct by a public servant
- Section 13(1)(c) PC Act –criminal misconduct by a public servant
Overview
- Accused no.3- C.Vinay Kumar opened an account in Sri Rama Grameena Bank, Nizambad branch with a starting deposit of 5,00,000/-. He was the manger of financial issues of Nishita Educational Academy.
- The appellant- N.Raghavender who was accused no.1 was Manager of the bank and was also brother-in-law of accused no 3.
- Accused no. 2 was A. Sandhya Rani. She was a clerk-cum-Cashier in the same bank from year 1991-1996.
- Accused no.2 and 1 conspired with accused no.3 by permitting withdrawal of Rs. 10,00,000/- from the Academy’s account though there were no requisite funds for such withdrawal.
- 3 cheques were issued by the appellant for withdrawal of said amount but the debit was not entered in the ledger book. The third cheque issued showed transaction in favor of accused no.3 but his signature did not tally with that of the cheque.
- The appellant was accused of closing two FDR’s prematurely on 24th and 25th February 1995 for Rs 10,00,000/- and 4,00,000/- which stood in the name of B.Satyajit Reddy. Hence, total 14,00,000/- were credited to the account but only 4,00,000/- were shown in the ledger and the remaining 10,00,000 were mixed with the secret withdrawal in year 1994.
- After noticing the irregularity, the appellant was shifted to Head office from Nizamabad Branch and an internal query was ordered. Hence, the Bank’s Chairman filed a written complaint to the superintendent of Police, CBI at Hyderabad.
- Case was registered by CBI under section 409, 477(A), and 120B of IPC and section 13(2) read with 13(1)(c) and (d) of the PC Act and charges were framed against the accused and appellant by the Special CBI judge.
- The accused were charged u/s 120B IPC, 13(2) r/w 13(1)(c) of the PC Act. The appellant was held guilty u/s 420, 409 and 477A IPC and 13(2) r/w 13(1)(c) of the PC Act.
- Aggrieved by the order passed by the Trial Court, appellant approached the High Court where the Court said that the appellant had taken advantage of his position. Dissatisfied by this, the appellant approached Hon’ble Supreme Court.
- Arguments from appellant- the appellant was accused for prematurely closing two FDR’s which belonged to B.Satyajit Reddy but Mr Reddy was not examined by the CBI nor his statement was recorded while internal auditing. Relying on the case of Hari Sao vs State of Bihar, the counsel said that the bank did not face any loss due to the act of appellant and hence nothing should be held against the appellant. By focusing on judgment of case Samsul Haque v. State of Assam 2019, the counsel argued that the appellant did not get a chance to explain the circumstances. There was also absence of mens rea as there was no benefit on the part of the appellant even if cash was handed over to accused no.3.
- Arguments from respondent- it was submitted that to prove mens rea or to prove the charge u/s 420, 409 and 477A IPC, it was not a mandate to show that the appellant benefitted from the act. The appellant was the head of the branch and it was his duty to take the responsibility which he failed. He also argued that the appellant had complied with all the transactions as well as all the conditions and requirements were adhered to.
Issues
- Whether the decision given by Trial Court and High Court was justifiable?
- Whether the appellant was guilty under the sections which were framed against him?
Judgment Analysis
- The appellant’s appeal was disapproved by the Court. Before passing the order, the Court discussed conditions necessary for a charge to be held under section 409, 420 and 477A of IPC and it was held that the prosecution had failed to prove charges under the aforementioned sections.
- Moreover, his conviction under section 13(2) r/w 13(1)(c) of the PC Act was also not sustained. The benefit of the doubt granted to him because of the razor-thin margin between "strong suspicion" and "conclusive proof" did not permit him to file a second round of appeal to seek reinstatement or other service benefits from the Bank.
- Hence, the appellant was dismissed from service as a punishment for gross departmental misconduct.
Conclusion
In this case,
- There was no financial loss caused to the bank.
- The record presented did not prove that B. Satyajit Reddy or any other person had suffered loss.
- The evidence in hand did not prove that there was any conspiracy amongst the accused.
- Gross misconduct was committed by the appellant by misusing his position of power.
- None of the acts done by the appellant fell under the ambit of section 409, 420, 477A IPC.
As a result the petition filed by the appellant was dismissed.
The Bank is obligated to return funds to consumers when requested. However, until that time comes, the Bank is free to use the funds. A creditor and a debtor relationship exists between the consumer and the bank.
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