S.V.L.MURTHY versus STATE REP. BY CBI, HYDERABAD

Citation: [2009] 7 S.C.R. 784 · Decided: 06-05-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2009] 7 S.C.R. 784 
A 
S.V.L. MURTHY 
.. 
v 
STATE REP. BY CBI, HYDERABAD 
Criminal Appeal No. 942 of 2009 
B 
MAY 6, 2009 
(S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.) 
Penal Code, 1860/Prevention of Corruption Act, 1988: 
.. 
Sections 409, 415, 420, 120-B!Section 13(2) r/w 13(1)(d) 
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c - Alleged cheating of Bank - All six accused found guilty for 
offences under Section 120-B, 420 /PC and three ·accused 
found guilty for offence under Section 13(2) rlw 13(1) of 
Prevention of Corruption Act -
Convicted - High Court 
affirming the order, but acquitting one accused - On appeal, 
D Held: Prosecution failed to prove conspiracy as also wrongful 
gains - Impugned judgment unsustainable and set aside -
Negotiable Instruments Act, Section 138. 
Constitution of India, 1950: 
E 
Article 136 - Special Leave jurisdiction - Ordinarily 
concurrent finding of fact not interfered with - However, the 
;urisdiction must be exercised whenever it is required to do so 
for securing the ends of justice and to avoid injustice. 
A charge sheet was filed under Sections 120-B, 420 
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F IPC r/w Section 13(1)(q) of the Prevention of Corruption 
Act alleging inter alia that there was criminal conspiracy 
between the accused persons to cheat the State Bank of 
India. 
Special Judge for CBI cases found A-1 to A-6 guilty 
G for the offence under Section 120-B and 420 IPC, A-4 to A-
6 were found guilty for the offence under Section 13(2) r/ 
-+ 
4 
w 13(1)(d) of the Prevention of Corruption Act, 1988. 
Accordingly, he convicted and sentenced the accused. 
H 
784 
S.V.L. MURTHY V STATE REP BY CBI, HYDERABAD 785 
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High Court dismissed the appeals of the accused, but A 
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acquitted A-6. Hence the appeals. 
Allowing the appeals, the Court 
HELD: 1.1 For the purpose of constituting an offence 
of cheating, the complainant is required to show that the 8 
accused had fraudulent or dishonest intention at the time 
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of making promise or representation. Even in a case 
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where allegations are made in regard to failure on the part 
of the accused to keep his promise, in absence of a 
culpable intention at the time of making initial promise c 
being absent, no offence under Section 420 of the Indian 
Penal Code can be said to have been made out. [Para 21] 
[810-F-G] 
1.2 It is reiterated that one o'f the ingredients of 
cheating as defined in Section 415 of the Indian Penal D 
... 
Code is existence of an intention of making initial promise 
or existence thereof from the very beginning of formation 
of contract. [Para 21] [810-H; 811-A] 
Hira Lal Hari Lal Bhagwati v. CBI (2003) 5 SCC 257; 
Indian Oil Corporation v. NEPC India Ltd. & Ors. (2006) 6 SCC 
E 
736; Vir Prakash Sharma v. Anil Kumar Agarwal (2007) 7 SCC 
373; All Caroga Movers (/) Pvt. Ltd. v. Dhanesh Badarmal Jain 
& Anr. 2007 (12) SCALE 391; R. Kalyani v. Janak C. Mehta & 
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Ors. 2008 (14) SCALE 85 and Sharon Michael & ors. vs. State 
of Tamil Nadu & Anr. 2009 (1) SCALE 627 - relied on. 
F 
2. It may be that there had been certain procedural 
irregularities in the transaction. However, sufficient 
evidence is available on record to show that the Officers 
had done so for the purpose of promoting the business 
of the Bank. In relation whereto or in respect whereof, G 
initiatives had been taken by P.Ws. 19 and 20. It is 
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j.. 
furthermore not denied or disputed that after the cheque 
discounting facility was stopped in April, 1989 by Accused 
No.4, there has been a meeting at the residence of P.W; 
20. In his deposition, the said witness categorically 
admitted that the said meeting was arranged at the H 
786 
SUPREME COURT REPORTS 
[2009] 7 S. C.R. 
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A instance of Accsued No.1. It is incomprehensible that a 
meeting has been arranged at his residence on the day 
he was on leave at the instance of Accused No.1. He must 
have developed grievance against the Accused No.4 as 
regards the stoppage of the said facility. If immediately 
B thereafter the said facility had been restored by the 
Accused No.4, a stand taken by him that it was done under 
the oral instructions of the higher authorities appears to 
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be plausible. [Para 22] [813-E-.H; 814-A] 
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3. The prosecution 1apart from the fact that it had 
c utterly failed to bring on record any evidenc~ of 
conspiracy must also be held to have failed to bring on 
record any evidence of wrongful gain so as to attract the 
provisions of the Prevention of Corruption Act, 1988 or 
otherwise. [Para 23] [814-A-B] 
D 
. 4. The findin

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