LexN.V. SUBBA RAO versus STATE, THROUGH INSPECTOR OF POLICE, CBI/SPE,VISAKHAPATNAM, A.P.
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(2012] 12 S.C.R. 701 N.V. SUBBA RAO v. STATE, THROUGH INSPECTOR OF POLICE,CBl/SPE, VISAKHAPATNAM, A.P. (Criminal Appeal No. 1688 of 2008) DECEMBER 3, 2012 [P. SATHASIVAM AND RANJAN GOGOi, JJ.] Prevention of Corruption Act, 1988-s.13(1)(d) rlw s.13(2) A B - Penal Code, 1860 - s.120-B rlw s.420 - Allegation that A- C 1, Bank Manager, abused his official position as a public servant and entered into a criminal conspiracy with A-2, proprietor of a private firm, and defrauded the Bank by sanctioning temporary over-drafts and term loans to various individuals sponsored by A-2 - Conviction of A-1 and A-2 u/ D ss.120B and 420 /PC and further A-1 uls.13(1)(d) rlw s.13(2) of the. Prevention of Corruption Act - Justification - Held: Justified - Obtaining of undertaking letters from the loanees was one of the important pre-requisite for sanctioning of the loans - A-1 failed to obtain undertaking letters from all the E loanees and misrepresented about the same to the higher authorities of the Bank - A-1 also did not carry out pre- inspection, a mandatory requirement according to the Manual of Instructions of the Bank - A-1 also willfully evaded his duty of opening bank accounts leaving the Bank without any F recourse to receive monthly installments -A-1 gave statement uls.313 CrPC that he remitted the amount of all the loanees into the account of A-2 and A-2 admitted the same - Evidence led in by the prosecution, particularly, the evidence of Typist of A-2 shows several meetings between A-1 and A-2, G acceptance of money by A-1 from A-2 on many occasions, transfer of sanctioned loans to the credit of the account of A- 2 etc. - Joint role played by A-1 and A-2 and their connivance and active collusion in cheating the bank and the borrowers 701 H 702 SUPREME COURT REPORTS [2012] 12 S.C.R. A thus established - From the proved facts, one can legitimately draw a presumption that in connivance with A-2, A-1 caused monetary loss to the Bank by sanctioning loans without following the established procedure - Prosecution established its charges beyond reasonable doubt by placing acceptable B materials in form of oral and documentary evidence. Penal Code, 1860 - ss.120-A and 120-8 - Criminal conspiracy - Proof - Held: Conspiracy is hatched in secrecy and for proving such offence substantial direct evidence may not be possible to be obtained - An offence of criminal C conspiracy can also be proved by circumstantial evidence. FIR was registered alleging that A-1, Bank Manager, abused his official position as a public servant and entered into a criminal conspiracy with A-2, proprietor of D a private firm (M/s A.P. Enterprises), and defrauded the Bank to the tune of Rs.1.168 crores by sanctioning temporary over-drafts and term loans to various individuals sponsored by A-2. It was alleged that A-1 was instructed by his Controlling Officers to disburse loans E to the employees of Railways and other organisations only after obtaining an undertaking from their employers (borrowers) that the monthly installment of repayment of loan will be deducted from their salaries as primary security and also to obtain a mortgage on the plots sold F to the borrowers through M/s A.P. Enterprises; that A-1 fraudulently and dishonestly disbursed loans to various railway employees and credited the proceeds to the account of A-2 without obtaining the requisite undertaking from the employers and without proper G security of monthly installments to be deducted from their salaries; that A-2, after having received the proceeds of 45 such borrowers, fraudulently and dishonestly did not get 45 plots registered in their names nor the borrowers got the loan amount from the Bank. H The trial court convicted A-1 and A-2 under Section N.V SUBBA RAO v. STATE, THROUGH INSPECTOR OF 703 POLICE,CBl/SPE, VISAKHAPATNAM, AP. 120B and 420 IPC and further A-1 under Section 13(1)(d) A read with Section 13(2) of the Prevention of Corruption Act, 1988. The order was affirmed by the High Court. Hence the present appeals by A-1 and A-2. Dismissing the appeals, the Court B HELD:1. Obtaining of undertaking letters from the loanees was one of the important pre-requisite for sanctioning of the loans, which A-1 did not fulfill. A-1 failed to obtain the undertaking letters and misrepresented about the same to the higher authorities C of the Bank. The claim of A-1 that it was only mere dereliction of duty c
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