Tuesday, 6 October 2015

When witness can be given up by prosecution after putting two questions to him?

 P.W. 6 was given up by the prosecution after putting two questions to him in chief-examination and after showing him Ext. P12 file but without eliciting any answer from him. The above procedure adopted by the prosecution is to be deprecated (See Hamsa v. State of Kerala. 1966 KLT 136).A witness can be given up before he enters the witness box. Even when a witness enters the witness box and oath is administered to him, it is not too late and he can be asked to withdraw from the witness box. But once chief examination is commenced, the party who calls him cannot give up the witness or withdraw him and thereby deprive the opposite party the right of cross-examination. The practice of the prosecution giving up a witness after the commencement of chief-examination and without tendering the witness for cross-examination is unhealthy, irregular and not warranted by law. (See Lalitha v. Sarangadharan - 1988 (2) KLT 394). In Sukhwant Singh v. State of Punjab - MANU/SC/0305/1995 : AIR 1995 SC 1601 the Apex Court observed as follows: --
Section 138 envisages that a witness would first be examined-in-chief and then subjected to cross-examination and for seeking any clarification, the witness may be reexamined by the prosecution. There is, No. meaning in tendering a witness for cross-examination only. Tendering of a witness for cross-examination, as a matter of fact, amounts to giving up of the witness by the prosecution as it does not choose to examine him in chief. There is No. procedure whereby the prosecution is permitted to tender a witness for cross-examination only, without there being any examination-in-chief in relation to which, such a witness can be cross-examined. The effect of witnesses being tendered only for cross-examination amounts to the failure of the prosecution to examine them at the trial. Their non-examination, in our opinion, seriously affects the credibility of the prosecution case and detracts materially from its reliability.
Thus, the prosecution was not justified in giving up P.W.6. after putting two questions to him in chief-examination.
Equivalent Citation: 2011CriLJ2801, 2011 (1) KHC 738, 2011(1)KLJ764
IN THE HIGH COURT OF KERALA
Criminal Appeal Nos. 295, 296, 304, 305, 307, 315 and 316 of 2000 (C)
Decided On: 18.02.2011
Appellants: Rajeevan Aswathy
Vs.
Respondent: Superintendent of Police
Hon'ble Judges/Coram:
V. Ramkumar, J.



1. These appeals filed under Section 374(2) Code of Criminal Procedure arise out of the common judgment dated 28-4-2000 on the file of the Court of the Special Judge (SPE/CBI) -1, Ernakulam (hereinafter referred to as the "Special Court" in C.C. Nos. 9, 10 and 11 of 1993. Two of the accused in two of the aforesaid C.C. Cases are common. In C.C. 9 of 1993 there were three accused persons and in C.C. Nos. 10 and 11 of 1993 there were two accused persons. The first accused in all the three cases namely Joseph Alappatt is a common accused. The appeals filed by the said common first accused in C.C. Nos. 9, 10 and 11 of 1993 are Crl. Appeals 307, 315 and 316 of 2000. Crl. Appeal 304 of 2000 is filed by the 2nd accused (H. Vahab) in C.C. 9 of 1993. Crl. Appeal No. 295 of 2000 is filed by the 3rd accused (Rajeevan) in C.C. 9 of 1993). Crl.A. 305 of 2000 is filed by the 2nd accused (K. Thajudheen @ Thaju) in C.C. 10 of 1993. Crl.A. 296 of 2000 is filed by the 2nd accused (Rajeevan) in C.C. 11 of 1993.
PROSECUTION CASE IN
C.C. 9 of 1993
2. The case of the prosecution in C.C. 9 of 1993 is as follows:
A1 (Joseph Alappatt) was working as the Manager of the Quilon Branch of the Punjab National Bank ("PNB" for short) during the period 1988-1990 and was competent to sanction term loans. He was responsible for conducting pre-sanction inspection of the units/premises of the applicants for loan for ascertaining the genuineness of the application and eligibility of the applicants before sanctioning the loan. Some time during October 1989 A1 (Joseph Alappatt), A2 (H. Vahab) and A3 (Rajeevan) entered into a criminal conspiracy to cheat PNB. In pursuance of the said criminal conspiracy, A2 representing the firm Salim Agencies filed a false loan application before PNB for a term loan of 1,50,000/- on 7-10-1989 to operate a shop for hiring steel tables and chairs. Along with the loan application A2 had enclosed a quotation from "Distributors Quilon" at Kadappakkada, a non-existing firm purportedly represented by A3 Rajeevan for the supply of folding chairs and folding tables for ` 2,04,375/- On 7-10-1989 itself A1 sanctioned the loan fully knowing that the loan application was false. A1 issued pay orders for `1,44,375/- dated 7-10-1989 and Rs. 60,000/- dated 16-10-1989 including the margin money of `54,375/- remitted by the loanee in favour of "Distributors Quilon". In pursuance of the said conspiracy A3 Rajeevan opened an account in the name of "Distributors Quilon" in the Quilon branch of the Dhanalakshmi Bank and credited the said pay orders in the said account and withdrew the credited amounts by means of cheques dated 11-10-1989 for `70,000/- and `74,000/- and by cheque dated 17-10-1989 for `60,000/-. A3 was not doing any steel furniture business at Kadappakkada under the name and style of "Distributors Quilon". He was actually running a Saw Mill at Quilon. He had not supplied any steel table or folding chairs to A2 and A2 had appropriated the loan amount with the assistance of A3. The quotation in the name of "Distributors Quilon", a non-existing firm was forged by A3 on or about 7-10-1989 intending that it shall be used for the purpose of cheating PNB. A1 (Joseph Alappat) being a public servant, in his capacity as the Manager of PNB, on or about 7-10-1989 by corrupt or illegal means or by otherwise abusing his position as such public servant, obtained for A2 pecuniary advantage to the extent of ` 1,50,000/- by sanctioning the said amount as loan from PNB acting on the false loan application submitted by A2 and by issuing the pay orders for `1,44,375/- and`60,000/-in favour of "Distributors Quilon", which were encashed by A2 with the assistance of A3. A1 to A3 thereby committed offences punishable under Sections 120B, 420 and 468 I.P.C. and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 ("the P.C. Act" for short).
PROSECUTION CASE IN
C.C. 10 of 1993
3. The case of the prosecution in C.C. 10 of 1993 is as follows:
In the month of November 1989 A1 (Joseph Alappat) who was working as the Manager of PNB entered into a criminal conspiracy to cheat PNB. In pursuance of the said conspiracy A2 (K. Thajudheen @ Thaju) representing the firm "Changathees Video Centre", submitted a false loan application before A1 on 3-11-1989 for a term loan of `1,50,000/- for purchasing video cassettes for running a video cassette library. Along with the loan application A2 had enclosed a false quotation in the name of a fictitious and non-existing firm by name "K.S. Agencies", M.G. Road, Trivandrum, for having purchased 1500 video cassettes for ` 1,01,000/-A1 knowing fully well that the quotation submitted along with the loan application was false, sanctioned the loan on the same day and P.N.B. issued a Demand Draft for `2,01,000/- including margin money of `51,000/- in favour of K.S. Agencies. A2 fraudulently opened an account in the Trivandrum Branch of PNB in the name of K.S. Agencies, M.G. Road, Trivandrum on 2-11-1989. A2 then presented the above D.D. on 6-11-1989 and drew the money thereunder. Thus the amount intended for the supplier was drawn by the loanee himself and the loan amount was not utilised for purchasing video cassettes. The quotation in the name of a non-existing firm by name K.S. Agencies, M.G. Road, Trivandrum was forged by A2 with the intention that it shall be used for cheating PNB by dishonestly inducing the bank to sanction the loan. A1 being a public servant, by corrupt or illegal means or otherwise abusing his position as such public servant obtained for A2 pecuniary advantage to the extent of `1.5 lakhs by sanctioning the said loan. A1 and A2 have thereby committed offences punishable under Sections 120B, 420 and 468 Indian Penal Code and Section 13(2) read with Section 13(1)(d) of the PC. Act.
PROSECUTION CASE IN
C.C. 11 of 1993
4. The case of the prosecution in C.C. 11 of 1993 is as follows:
Sometime in the month of Nov. 1988 A1 (Joseph Alappat), Branch Manager, PNB, Quilon, and A2 (Rajeevan), Proprietor, Aswathi Wood Industries, entered into a criminal conspiracy to cheat PNB. In pursuance of the said conspiracy A2 submitted a false loan application before the Bank on 27-11-1989 for a term loan of ` 1,50,000/- for running a saw-mill and for constructing a shed for the saw mill. Along with the said loan application A2 had enclosed a false quotation from M/s. Deepak Industries, Kadappakkada, Quilon for the supply of machinery costing about `1,42,485/- and a false quotation from C.K. Prasad, P.W.D. Contractor, Ayathil, Quilon for the construction of a shed for the saw mill for a sum of `64,924.81. On 5-12-1989, A1 sanctioned the loan fully knowing that the loan application was false. Accordingly, the Bank issued a pay order for ` 1,06,985/- in favour of Deepak Industries and Anr. pay order for `49,924.81 in favour of C.K. Prasad including margin money of `6,904.81 remitted by the loanee Rajesh, the brother of A2 opened account No. 532 in the Quilon Branch of the Dhanalakshmi Bank in the name of Deepak Industries, a fictitious firm and presented the pay order for ` 1,06,985/- in the above account on 6-12-1989 and withdrew the amount in instalments on different dates. C.K. Prasad, the P.W.D. Contractor presented the pay order for `49,924.81 in the said bank on 6-12-1989 and withdrew the amount. A2 did not utilise the loan for the purpose for which it was applied. C.K. Prasad did not construct the shed for the saw mill. A2 had appropriated the entire amount with the assistance of Rajesh and C.K. Prasad. The quotation in the name of M/s. Deepak Industries, Kadappakkada, Quilon, a non-existing firm was forged by A2 on or about 27-11-1989 intending that it shall be used for the purpose of cheating PNB. A1 being a public servant, by corrupt or illegal means or by otherwise abusing his position as such public servant had obtained for A2 pecuniary advantage to the tune of ` 1,50,000/- by sanctioning the above loan on the basis of false loan application and false quotations. A1 and A2 thereby committed offences punishable under Sections 120B, 420 and 468 I.P.C. and Section 13(2) read with Section 13(1)(d) of the P.C. Act.
THE TRIAL
5. As agreed to by both sides, all the aforesaid three C.C. cases were jointly tried by the Special Court. C.C. No. 9 of 1993 was treated as the main case in which evidence was recorded.
6. On the accused persons pleading not guilty to the separate charges framed against them for the aforementioned offenses, the prosecution was permitted to adduce evidence in support of its case. The prosecution altogether examined 26 witnesses as P.Ws. 1 to 26 and got marked 123 documents as Exts. P1 to P123. The prosecution also got marked four material objects as MO1 series. After the close of the prosecution evidence, the accused persons were questioned under Section 313(1)(b) Code of Criminal Procedure with regard to the incriminating circumstances appearing against them in the evidence for the prosecution. They denied those circumstances and maintained their innocence.
7. The common first accused namely Joseph Alappat had the following to submit further before the court below: He has not done anything against the interests of the Bank. It was his first posting as Manager at the Quilon Branch after his promotion. The profit of a Bank increases proportionately to the increase in credit limits. After his joining the Quilon Branch the Regional Office had given huge credit limits to the Quilon Branch. As a result of his work in the Quilon Branch that branch was upgraded from scale II Managers' Branch to Scale IV Managers' Branch. He was depending on Sri. Ayyappan (P.W.23), the loan officer for sanctioning all loans. Ayyappan belonged to that area and had been handling the loan section in different branches before joining the Quilon Branch. So he entrusted the loan section to Ayyappan. There were specific office orders entrusting the above responsibilities to Ayyappan. Those orders were withheld by the authorities. The loans granted in these cases were not big loans compared to loans worth crores of rupees which were sanctioned by the Quilon Branch. During his tenure a loan for Rs. 25 crores had been sanctioned to the Kerala Cashew Development Corporation and stock of KSCDC had to be inspected by the Manager himself every month. The said loan was spread over three districts and about 33 factories. The parties in this case had approached P.W.23 for the loan and had submitted the papers to him. After fulfilling the formalities, P.W.23 had put up the papers to A1 for sanction with his recommendations. A1 did not go for a thorough verification. He had not gone in search of the firm of the suppliers. It was not possible for the Manager to do so in the case of each and every loan account in a Branch like Quilon. What he had carefully verified was the credit worthiness of the borrower. For this he had depended on the valuation report of the bank's valuer of the properties and legal opinion of the title deeds pertaining to the immovable properties by the Bank's approved lawyers. This case was foisted against him since some of the senior officers thought that he was over smart.
8. H.B. Vahab (A2 in C.C. 9 of 1993) and Thajudeen (A2 in C.C. 10 of 1993) submitted that both of them were innocent.
9. Rajeevan (A3 in C.C. 9 of 1993) submitted that he had started the establishment by name Distributors Quilon in the year 1984, that he was getting letters sent to the address of the said establishment which had sales tax registration and he is prepared to produce evidence in this behalf. The said Rajeevan who was the 2nd accused in C.C. 11 of 1993 submitted that the amounts taken as loan for his factory by name Aswathy Wood Industries were fully utilised for the purpose of the loan, that his factory had all the requisite licenses and that the said factory is functioning even now.
THE TRIAL COURT'S VERDICT
10. The learned Special Judge after trial as per common judgment dated 28-4-2000 held-
(a) in C.C. 9 of 1993 that A1 to A3 therein conspired to secure pecuniary advantage to A2 (Vahab) to the tune of`1,50,000/- by furnishing bogus quotations for folding chairs and tables from Ms. Distributors Quilon, a non-existing firm and A1 sanctioned the loan on the date of application itself without complying with the formalities and without verifying whether the firm was an existing firm or not and thereby cheated the Quilon Branch of PNB and therefore, A1 to A3 committed offences punishable under Sections 120B, 420 and 468 I.P.C. and Section 13(2) read with Section 13(1)(b) of the P.C. Act
(b) in C.C. 10 of 1993 that A1 and A2 therein conspired together to obtain pecuniary advantage to A2 (Thajudeen @ Thaju) to the tune of ` 1,50,000/- by furnishing the bogus quotations for Video Cassettes from M/s. K.S. Agencies, M.G. Road, Trivandrum, a fictitious and non-existing firm and A1 sanctioned the loan on the date of application itself without complying with the formalities and without verifying whether the firm was a genuine one and thereby cheated the Quilon branch of PNB and therefore A1 and A2 have committed offences punishable under Sections 120B, 420 and 468 I.P.C. and Section 13(2) read with Section 13(1)(d) of the P.C. Act.
(c) in C.C. 11 of 1993 that even though Ext.P13 quotation for `64,924.81 submitted by the Contractor C.K. Prasad (P.W.19) for the construction of the shed for Aswathy Wood Industries, Quilon was true and A2 therein (Rajeevan) had got the shed constructed by utilising the loan amount, A1 and A2 therein conspired together to obtain pecuniary advantage to A2 (Rajeevan) to the tune of ` 1,42,485/- by furnishing the bogus quotations for machinery for saw mill from Deepak Industries, Quilon a fictitious and non-existing firm and on 5-12-1989 A1 sanctioned the loan which was applied for on 27-11-1989 without obtaining any report as to whether Deepak Industries was real or fictitious and without complying with the formalities and A1 and A2 have thereby committed offences punishable under Sections 120B, 420 and 468 I.P.C. and 13(2) read with Section 13(1)(d) of the P.C. Act.
Accordingly, -
i) each of the accused in each of the three cases was sentenced to rigorous imprisonment for one year for the conviction under Section 120B I.P.C.
ii) the common first accused (Joseph Alappatt) in each of the three cases was sentenced to rigorous imprisonment for one year and to pay fine of `5,000/- and on default to pay the fine to suffer rigorous imprisonment for three months for the conviction under Section 13(1)(d) read with Section 13(2) of the P.C. Act.
iii) A2 (Vahab) in C.C. No. 9 of 1993 and A3 (Rajeevan) in C.C. No. 9 of 1993 and A2 (Thajudeen @ Thaju) in C.C. 10 of 1993 and A2 (Rajeevan) in C.C. 11 of 1993 were each sentenced to rigorous imprisonment for one year and to pay a fine of ` 5,000/- and on default to pay the fine to suffer rigorous imprisonment for three months for the conviction under Section 420 I.P.C.
iv) A2 (Vahab) in C.C. 9 of 1993 and A3 (Rajeevan) in C.C. 9 of 1993 and A2 (Thajudeen @ Thaju) in C.C. 10 of 1993 and A2 (Rajeevan) in C.C. No. 11 of 1993 were each sentenced to rigorous imprisonment for one year and to pay a fine of ` 5,000/- and on default to pay the fine to suffer rigorous imprisonment for three months for the conviction under Section 468 I.P.C
THESE APPEALS
11. It is the aforesaid judgment which is assailed in these appeals.
12. I heard Advocate Sri. B. Raman Pillai, the learned Counsel appearing for the common first accused (Joseph Alappatt) in all the cases, Advocate Sri. K.A. Jaleel, appearing for A2 in C.C. 9 of 1993 and A2 (Thajudeen @ Thaju) in C.C. 10 of 1993 and Advocate Sri. T.R. Aswas, the learned Counsel appearing for Rajeevan (A3 in C.C. 9 of 1993 and A2 in C.C. 11 of 1993). I also heard Adv. Sri. M.V.S. Namboothiri, the learned Standing Counsel for the C.B.I.
13. The only point which arises for consideration in these appeals is as to whether the conviction entered and the sentence passed against all or any of the Appellants are sustainable or not?
14. THE POINT:
THE WITNESSES EXAMINED
IN THE CASE

Prosecution Witnesses
[A]. P.W.1. (B.R. Kher) was the Zonal Manager in the Zonal Office of P.N.B. Madras. It was this witness who sent Ext.P1 complaint dated 24-1-1991 to the S.P. CBI Cochin, by post. His complaint was on the basis of Ext. P2 enquiry report dated 20-4-1990 of P.W.2 (S.K. Prasad) who was the Chief Zonal Manager and on the basis of the report of P.W.3 (Anantharaman) who was a Senior Manager attached to the Zonal Office. Ext.P2 enquiry report of P.W.2 was marked subject to objection and the said objection was never considered at the time of final judgment. Ext.P2 (a) is a statement given in writing by P.W.23 (Ayyappan who was originally the 2nd accused in the F.I.R.) to P.W.2 on 16-3-1990. Ext. D1 Circular prescribing the mode and manner of preparing the confidential reports (C.R. for short) and Ext.D2 flash report from the Regional Manager to A1 directing A1 to achieve the target for priority sector advances fixed by the Regional Office, were marked through P.W.2. P.W.3 Anantharaman had, on the direction by P.W.1, conducted a detailed investigation regarding the accounts of several advances given from the Kollam Branch. Ext.P3 is the relevant portion of his Inspection report pertaining to C.C. 9 of 1993. Exts,P7 and P12 are the relevant portions of his report pertaining to C.C. Nos., 10 and 11 of 1993. Exts. P4 to P6 and P8 to P19 were also marked through him. P.W.4 (Koshy Jacob) was the Manager of State Bank of Travancore (S.B.T) Kollam. He was a witness to the search conducted in the premises of Aswathy Wood Industries. Ext.P20 is the search list signed by him and Ext.P21 is the file seized as per Ext. P20. P.W.5 (Abdul Vahab Sait) was the Executive Officer of Vadakkevila Panchayath, Kollam during April 1991. He proved Ext.P22 reply dated 20-4-1991 to the investigating officer stating that No. license was issued to Deepak Industries, Kadappakkada, Kollam from the said Panchayath. P.W 6 (Dr. Peer Muhammed) was the health officer of Thiruvananthapuram Corporation. He was cited to depose about K.S. Agencies. After putting 2 or three questions this witness was given up by the prosecution. P.W. 7 (G.B. Jagadhara Panicker) was the Junior Superintendent of Kilikkollur Panchayath. He proved Ext.P23 reply dated 20-04-1991 addressed to the C.B.I. Inspector in answer to the letter given by the C.B.I, asking him whether Deepak Industries was functioning in Kilikollur Panchayath area. P.W. 8 (Anil Damodaran) was working with Sastha Roadways, Ashramam, Quilon belonging to his brother during the period 1989-90. This witness stated that No. 78548 was the telephone No. of Sastha Roadways. P.W.9 (Appukuttan Nair) was working as a clerk in the Kollam branch of Dhanalakshmi Bank during 1989. He introduced Rajeevan (A3 in C.C. 9 and A2 in C.C. 11 of 1993) to open a current account in the said branch in the name of "M/s. Distributors Quilon" on 6-1-1989. Ext.P24 is the account opening form. P.W. 10 (T.S.S. Krishnan) was the manager of the Kollam Branch of P.N.B, from December 1989 onwards. He had succeeded A1 consequent on the transfer of A1 to Bangalore as Senior Manager. P.W. 11 (Lekshmanan Pillai) was the Manager of the Kollam Branch of the Dhanalakshmi Bank during 1987 to 1991. He proved Ext.P44 account opening form of current A/c. No. 531 of Deepak Industries, Kadappakkada, Kollam opened by R. Rajesh, Ext.P45 proprietorship declaration submitted by R. Rajesh, Ext.P46 ledger extract of the account of Deepak Industries from 6-12-1989 to 31-3-1991, Ext.P47 credit slip dated 7-12-1989 for crediting Rs. 106985/- as per Ext.P18 pay order of P.N.B. issued in favour of Deepak Industries, Ext.P48 series (17 Nos. ) of Cheques by which withdrawals were made from that account and Ext.P14 pay order of PNB issued in favour of C.K. Prasad (P.W. 19) which was credited to the account of P.W. 19. He also proved Exts. P24 and P.37 to P43 documents produced as per Ext.P49 letter and relating to the current account of Distributors Quilon belonging to A3 in C.C. 9/1993. P.W. 12 (K. Ramachandran Nair) runs a medical shop at Kollam and Thiruvananthapuram. He had introduced Thajudeen (A2 in C.C. 10 of 1993) to open a current account in the Trivandrum M.G. Road branch of Punjab and Sind Bank. Ext.P50 is the account opening form. A1 was not permitted to cross-examine this witness. P.W. 13(Radhakrishna Pillai) is a resident of Pattathanam, Quilon and the proprietor of K.K. Industries which is having an account with the Quilon Branch of the Dhanalakshmi Bank. He introduced Rajesh (Proprietor of Deepak Industries and who is his neighbour) to Dhanalakshmi Bank for opening an account as revealed by Ext.P44 account opening form. Rajeevan who was running Aswathi Industries and Distributors Quilon was also known to him. P.W. 14 (T.G.T. Nair) was the manager of Ernakulam Branch of P.N.B. He had produced before the C.B.I. Ext.P9 demand draft dated 3-11-1989 as per Ext.P51 letter dated 24-7-1992. P.W. 15 (Natesan) was the Postman in the General Post Office, Trivandrum during the period 1990-1992. He was examined to prove that he could not deliver Ext.P52 registered letter sent by the C.B.I. to K.S. Agencies, M.G. Road, Thiruvananthapuram and had returned the said letter to the C.B.I. with the endorsement "not known" dated 15-4-1991. P.W. 16 (John C. Chiramattel) is the proprietor of Highway Hotel, Thiruvananthapuram. He deposed that the sales tax registration number of his Hotel was 11111561 and he did not permit anybody to use the said KGST Number. P.W.17 (P.K. Gupta) was the Deputy General Manger of P.N.B. He issued Exts. P103, P104 and P105 sanction orders for prosecuting A1 in C.C. Nos. 9, 10 and 11/1993. P.W. 18 (K.P. Raju) was the manager of the Trivandrum Branch of the Punjab and Sind Bank. He had produced before the C.B.I. Ext.P 50 account opening form dated 2-11-1989 for opening a current account in the name of K.S. Agencies, Ext.P106 Ledger copy of the said account and Exts. P107 to P110 to prove the credit of `2,01,000/- on 6-11-1989 as per Ext.P9 Demand Draft and the subsequent withdrawals of the said amount from the above account by various cheques, and Ext. P11 specimen signature card of Thajudeen. Ext.P 112 is the letter dated 7-5-1999 as per which this witness had produced the aforesaid documents. P.W. 19 (C.K. Prasad) is a contractor who gave Ext.P 13 quotation dated 25-11-1989 to Aswathi Industries owned by Rajeevan (A2 in C.C. 11 of 1993) for a sum of`64,924.81 for the construction of a shed for Aswathy Industries. He completed the construction of a shed in December 1989. He had received ` 15,000/- in cash as advance and the balance amount was received by way of Ext.P 14 pay order which was given to him by P.W. 23 who was a senior officer of the PNB. Ext.P14 pay order was credited to the account of this witness in the Quilon Branch of Dhanalakshmi Bank. P.W. 20 (P.S. Nair) was the Inspector, C.B.I. He conducted the search of Aswathy Wood Industries on 4-3-1991. Ext.P20 is the search list. Ext.P21 file was one of the items seized from Aswathy Wood Industries. MO1 (b) and MO 1 (c) seals of Aswathy Wood Industries and Distributors Quilon were also seized during the above search. P.W.21 (Devanandan) was the postman of the Head Post Office, Kollam, during the year 1991. He proved Ext. P 113 undelivered cover containing the letter dated 14-08-1991 by the C.B.I. addressed to the Proprietor Deepak Agencies, Kadappakkada and Ext.P 113(a) endorsement "not known" made by this witness. He also proved Ext.P114 undelivered cover containing the letter dated 10-4-1991 from the C.B.I. addressed to M/s. Distributors Quilon and Ext.P114 (a) endorsement "not known" made by him. P.W.22 (T. Sasidhara Panicker) was an additional witness. He was the Manager of PNB, Ernakulam. He proved Ext.P115 (photocopy of the general instructions regarding the term loans and credit facilities) and also the relevant pages namely pages 31 to 60, 117 to 133 and 229 to 248. P.W.23 (K. Ayyappan) was the Assistant Manager cum Accountant in charge of loans and advances in the Kollam Branch of PNB since 9-8-1989 onwards. He was a Scale I officer of the Kollam Branch. He was originally A2 in Ext.P 118 F.I.R. and his name was deleted only in the final report dated 25-3-1993 filed under Section 173(2) Code of Criminal Procedure and it was on that day that his statement under Section 161 Code of Criminal Procedure was recorded. He also proved Exts. P116 and 117 rent deeds. Ext.P2 (a) is the statement given by this witness to P.W.2 during the enquiry conducted by the latter. In Ext.P2 (a) statement as well as in his deposition before Court, this witness confessed that it was he who verified all the loan applications in these cases and recommended to A1 to sanction the loans. P.W.24 (Sobhana) was the Junior Superintendent in the office of the Sales Tax, Ist Circle, Thiruvananthapuram during the year 1991. According to her M.G. Road, Trivandrum was within the limits of 1st Circle, and when the C.B.I. officer asked her about K.S. Agencies, M.G. Road, Trivandrum, she had verified the R. Register to say that there was No. establishment known as K.S. Agencies in M.G. Road, Trivandrum and that No. sales tax number was allotted to the said establishment. P.W.25 (T.V. Lekshmanan) was the Inspector, C.B.I., Kochi who conducted the major part of the investigation. He registered Ext.P 118 F.I.R. on 20-01-1991 on the basis of Ext.P1 complaint given by P.W.1, questioned witnesses, seized various documents by issuing letters to various witnesses who produced the same along with their replies. He conducted the investigation till 24-6-1992. Exts.P118 to P122 were proved through him. P.W. 26 (Ramesh Kumar) was the Inspector, CBI, Cochin, who conducted the investigation from 24-6-1992 onwards. After conclusion of investigation he filed separate final reports on 25-3-1993 in R.C. 2 (A) of 1991 with regard to the three loan accounts in C.C. Nos. 9, 10 and 11 of 1993. It was on 25-03-1993 that he recorded the statement of A2 (Ayyappan who was subsequently examined as P.W. 23) whose name was deleted in the final report filed on that day.
Defence Witnesses
[B]. D.W.1 (Sathyaseelan) was the Sales Tax Officer of Ist Circle, Kollam. He proved Ext.D3 certificate showing that Distributors Kollam belonging to Rajeevan (A3 in C.C. 9/1993 and A2 in C.C. 11/1993) was having sales tax registration from the year 1983-84 onwards. He also proved Ext.D4 notice issued to Rajeevan of Aswathy Industries. He deposed that in Exts. P4 and P5 quotations given by Distributors Quilon the sales tax registration number has been quoted. DW2 (Gopalakrishnan Achari), who was, the Secretary of Kollam Vadakkevila Panchayath proved Ext.D6 license dated 5-01-1990 issued in favour of Rajeevan to show that Aswathy Wood Industries was functioning in a building in that Panchayath. He also proved Ext.D2 renewed license for the period ending in the year 1999. DW3 (C.S. Sreenivasan) was the Inspector of Factories and Boilers who proved Ext.D8 license dated 26-11-1991 in favour of R. Rajeevan, Aswathy Wood Industries. He also proved Ext.D9 license book. DW4 (Radhakrishna Kammath) was the manager of the Kollam Branch of the Corporation Bank. He proved Ext.D10 current account of M/s. Distributors Quilon from 16-7-1986 onwards and deposed that the last entry in that account is on 12-3-1995. DW5 (Vasudevan Pillai) was the postman of Beat I of Kadappakkada Post Office. He proved Ext.D 11 acknowledgment card which was returned to Distributors Quilon on 14-6-1984 from the addressee namely M/s. Dharamshi Enterprises, New Road, Kochi.
THE STAND of CBI
15. Adv. Sri. M.V.S. Namboothiri, the learned Standing counsel for the C.B.I. argued that the trial Judge has properly marshelled the oral and documentary evidence adduced in the cases and has rightly convicted the Appellants against whom a sentence commensurate to their conviction has also been passed and the same do No. call for any interference at the hands of this Court.
JUDICIAL EVALUATION
16. I am afraid that, after a careful reappraisal of the oral and documentary evidence in this case, I find myself unable to agree with the above submission made by the Standing Counsel for the C.B.I. The following are the reasons to support my conclusion:
C.C. 9 of 1993:
17. The case of the prosecution in C.C. 9 of 1993 as upheld by the trial Court is that A1 sanctioned the loan of ` 1,50,000/- on 7-10-1989 which was the date on which Salim Agencies; represented by A2 (Vahab) had submitted the loan application along with bogus quotation for folding chairs and tables from Distributors Quilon, a non-existent firm of A3 and subsequently A3 opened an account in the Dhanalakshmi Bank, Kollam Branch in the name of M/s. Distributors Quilon and withdrew the amounts. Ext.P28 is the loan application dated 7-10-1989 submitted by A2 (Vahab) on behalf of Salim Agencies. Exts. P4 and P5 are the invoices dated 14-10-1989 and 17-10-1989 from Distributors Quilon represented by A3 Rajeevan. Ext. P6 is the quotation dated 27-09-1989 from Distributors Quilon. Ext.P29 is the transfer credit voucher dated 7-10-1989 for `1,44,375/-. Ext.P24 is the account opening form of Dhanalakshmi Bank, Quilon Branch pertaining to the current account opened by Rajeevan in the name of Distributors Quilon on 6-1-1989. Rajeevan was introduced by P.W.9, a clerk in the same branch.
18. It is an admitted fact that even before the disbursal of the loan amounts in all the three cases, the loans were fully secured by collateral security. If so, an intention to cheat the bank cannot be readily inferred. P.W.1 the Chief Zonal Manager has admitted at page 12 of his deposition that the primary concern of the bank while granting loans is the security. At page 13 of his deposition P.W.1 has admitted that the loans issued in these cases were utilised for the purpose for which they were sanctioned although not properly utilised. He has also admitted that legal opinion had been taken beforehand. Going by the testimony of P.W.23 the legal opinion will usually bear the same date as that of the loan application. Even P.W.3 the Senior Officer from the Zonal Office who had conducted spot verification of Salim Agencies belonging to A2 (in C.C. 9 of 1993) had seen old and rusted furniture there. The specific case of the prosecution is that even the account in Dhanalakshmi Bank was opened by A3 in pursuance of the criminal conspiracy. But, going by the testimony of P.W.9 the Clerk of Kollam Branch of Dhanalakshmi Bank the current account of M/s. Distributors Quilon represented by Rajeevan had been opened on 6-1-1989 which was long before the filing of loan application by A2. He has further stated that the said account of Distributors Quilon is a live account even now. Ext.P28 is the loan application dated 7-10-1989 in C.C. 9 of 1993 requesting for a loan of Rs. 1,50,000/-for conducting the business of lending folding chairs and folding tables. Along with Ext.P28 A2 had produced Ext.P6 quotation from A3 who had agreed to supply chairs worth Rs. 60,000/-and tables worth Rs. 1,44,375/-. A2 had also produced Ext.P35 project report dated 15-09-1989. It is in evidence that it was P.W. 23 (Ayyappan) who was a Scale-I officer in-charge of the loans and advances who had recommended the loans. Similarly, it was P.W.23 who admittedly had prepared the confidential reports (C.R.) in all the three cases. Ext.C1 (a) office order dated 9-08-1989 will go to show that as per the delegation of powers it was for P.W. 23 to process the loan applications, conduct pre-sanction inspection, maintain the ledgers etc. and recommend to the Branch Manager (who was then A1) to sanction the loan. In Ext.P2 (a) statement which P.W.23 had given to P.W.2 during the enquiry conducted by the latter, P.W.23 had admitted his role in preparing the CRs, processing the loan applications and finally recommending the loans. This report was never revealed by P.W.2 or P.W.23 to the investigating officer. Nor was it shown as an item of evidence in the final report filed by P.W. 26. There was No. direction from the Court either for the production of Ext.P2 (a) statement. Ext.P2 (a) statement given by P.W.23 to P.W. 2 was flourished by P.W.2 during his chief examination and was vigilantly got marked by the defence as Ext.P2 (a). P.W.2 has also confessed that all the loans were recommended by P.W.23 who was the Scale I Officer in-charge of the loans and advances in the Kollam Branch of PNB.P.W.2 has further admitted that P.W.23 had prepared the CRs for each of the loans and had forwarded copies of the same to the Regional Office and No. discrepancy was ever pointed out about these advances. It was further admitted by P.W.2 that the details of the loan sanctioned every month would be reported to the Regional Office during the next month for scrutiny and verification and to his knowledge No. discrepancy was noted in those advances P.W.3 the Senior Manager who allegedly conducted the first enquiry confessed that he could not level any specific charge against A1 with regard to the sanctioning of loan to Salim Agencies belonging to A2 in C.C. 9 of 1993. The facts brought out in the cross-examination of P.W.3 would clearly show that the inspection or enquiry allegedly conducted by him was only a mockery. It was without personally visiting the firms which were alleged to be non-existent that P.W.3 gave Ext.P3 report in C.C. 9 of 1993, Ext. P7 report in C.C. 10 of 1993 and Ext. P 12 report in C.C. 11 of 1993.
19. The evidence of P.W. 10 the Senior Manager who succeeded A1 will go to show that by the time A1 was transferred to Bangalore the volume of business in the Kollam Branch which was only a Scale II Branch (when A1 joined the said Branch) increased to that of a Scale III Branch due to the hard work of A1 and A1 who was only a junior officer who did not have the requisite seniority to hold the post of the Manager of a Scale III branch had to be transferred. It is pertinent to remember that P.W. 10 who took charge at Kollam in December 1989 had found the CRs in all the three loan files. According to P.W. 10 preparation of the CR is the most important part of pre-sanction inspection. It has been unequivocally admitted by P.W. 10 that in a branch where there is a loan officer (as in the case of P.W. 23) the managers used to sanction the loan without any further verification of the pre-sanction measures taken by the loan officer. This is a case in which P.W. 23 who was a Scale I officer had with full authority recommended all the loans. He was initially made the 2nd accused in the case but was deleted from the array of accused only on the date of filing the final report after recording his statement under Section 161 Code of Criminal Procedure on the same day. If P.W. 23 was the senior officer who was in-charge of loans and advances and if it was he who had conducted the pre-sanction inspection and had also prepared the CRs in all the three loans and if it was P.W.23 Who had recommended to sanction the loans, A1 cannot be blamed if he acting on such recommendation in good faith had sanctioned the loans in question. Absolutely No. reasons have been given as to why P.W.23 who had performed all the pre-sanction formalities in all the three cases was exonerated by the investigating officer.
20. The finding that Distributors Quilon is a fictitious and non-existing firm is also opposed to the evidence in the case. According to the prosecution, Ext.P114 registered letter dated 10-4-1999 sent by the C.B.I. to the Distributors Quilon, Kadappakkada, Quilon could not be delivered in the said address by P.W.21 the postman of the Head Post Office, Kollam and the said letter was returned undelivered with the endorsement "not known" by P.W.21. First of all, merely because a letter addressed to a particular firm in the year 1991 returned undelivered for the reason that the firm is "not known", does not necessarily mean that the said firm was not in existence in the year 1989 when the transactions took place. Distributors Quilon was shown as located at Kadappakkada which according to P.W. 21 is Quilon - 8 which was not within the limits of the Head Post Office, Quilon. The prosecution did not examine anybody from the Kadappakkada Post Office. The defence examined D.W.5 who was the postman of Beat-I of Kadappakkada Post Office. Ext.D11 is the letter dispatched from Distributors Quilon to M/s. Dharamshi Enterprises, New Road, Kochi. Ext.D12 acknowledgment shows that the postal acknowledgment card promptly came back to Distributors Quilon in its Kadappakkada address. Exts. P4 and P5 quotations from Distributors Quilon had clearly shown the sales tax registration number of the said firm. No. enquiry was made with the Sales Tax Authorities as to whether Distributors Quilon had sales tax registration. The defence examined D.W.1 who is the sales tax officer, Ist Circle, Kollam to prove Ext.D3 certificate dated 24-7-1999 showing that Distributors Quilon had sales tax registration. He also proved Ext.D4 notice dated 14-01-1987 issued to Rajeevan, Proprietor of Distributors Quilon. P.W.25 the investigating officer admitted that he did not make enquiries either with the sales tax or the postal authorities as to whether the firms were existing or not. The testimony of P.Ws 5 and 7 will go to show that Kadappakkada is within the limits of Kollam Municipality. Nobody from Kollam Municipality was examined by the prosecution. Both P.Ws 3 and 10 were unable to give any of the details regarding the so called enquiry made by them to locate Distributors Quilon. P.W. 13 who is the proprietor of K.K. Industries at Pattathanam, Kollam is the person who introduced Rajesh the brother of Rajeevan. This witness is a neighbour of Rajesh. He would say that Distributors Quilon and Aswathy Wood Industries are both at Kadappakkada and are located at a distance of 21/2 kMs. from each other. He further deposed that Distributors Quilon was started during the life time of the father of Rajesh and it deals with bulbs, tubes furniture, fan etc.
21. All the loans were granted on the strength of collateral security after taking into account the valuation made by the valuers namely one Asokan and one Subrahmania Iyer (both of whom were not examined) and also on the strength of confidential reports which were suppressed. A1 had sanctioned the loans acting on the recommendations of P.W.23, the Senior Manager who had conducted the pre-sanction inspection and who had not made any report to the effect that any of the firms including Distributors Quilon was fictitious. If so, A1 the Branch Manager cannot be blamed at all in sanctioning the loans. The Court below was not right in accepting the prosecution case in this behalf.
C.C. 10 of 1993:
22. The case of the prosecution is that A2 (Thajudheen @ Thaju) styling himself as the proprietor of Changathees Video Cassette Centre, Kundara, applied for a loan of ` 1,50,000/- for purchase of Video Cassettes by producing bogus quotation from a non-existing firm by name K.S. Agencies, M.G. Road, Trivandrum and A1 the Manager knowing fully well that K.S. Agencies was a fictitious firm sanctioned the loan and A1 and A2 thereby cheated PNB. Ext.P64 is the loan application dated 3-11-1989 submitted by A2. Ext.P8 is the quotation from K.S. Agencies, M.G. Road, Trivandrum. Ext.P10 is the bill dated 4-11-1989 for `2,01,000/- regarding the sale of video cassettes to Changathees Video Cassette Centre of A2. The borrower's contribution was `51,000/- thus making a total of `2,01,000/-. This loan also was supported by adequate collateral security in the form of immovable property of one Haneefa Kunju. Ext.P79 is the legal opinion regarding the title of the guarantor. Ext.P78 is the valuation report prepared by Subrahmaniya Iyer (who was the Bank's valuer) regarding the collateral security. Ext.P79 is the legal scrutiny report dated 28-09-1989 by Advocate v. Balakrishna Pillai with regard to the property of the guarantor. Ext.P80 is the balance sheet of Changathees Video Cassette Centre prepared and signed by a Chartered Accountant. Ext.P106 is the ledger extract of current account number 476 of K.S. Agencies with the Trivandrum Branch of the Punjab and Sind Bank. Ext.P76 is the limit proposal dated 3-11-1989 for sanctioning the term loan of ` 1,50,000/- to Changathees Video Cassette Centre. This was filled up by P.W.23 who had recommended to A1 to sanction the loan. If there was any criminal conspiracy as alleged, there was No. need to execute hypothecation deed by the guarantor or obtain legal opinion by the Bank acting through P.W.23. In this case also it was P.W. 23 who conducted the pre-sanction inspection and carried out all other formalities. It was P.W.23 who recommended to A1 that the loan applied for could be sanctioned. It was again P.W. 23 who prepared the CR pertaining to this loan also. Ext.P9 is the D.D. for`2,01,000/- in favour of K.S. Agencies.
23. Ext.P52 is the registered letter addressed by the CBI Inspector to K.S. Agencies, M.G. Road, Trivandrum. It was P.W. 15 the postman attached to the G.P.O. Trivandrum, who returned Ext.P52 letter undelivered to the CBI Inspector with his endorsement "not known" dated 15-04-1991. Here again, from the mere fact that an address which was not known to the postman in April 1991, it cannot be straightaway assumed that the firm was not in, existence in, the year 1989 when the transaction took place. That apart, there is the admission by P.W. 15 himself that the entire area of M.G. Road, Trivandrum was not within his limits and that there were two other postmen in the G.P.O. Trivandrum for M.G. Road area. By examining P.W. 15 who was a postman who had jurisdiction only over a portion of M.G. Road, Trivandrum the prosecution cannot succeed in showing that there was No. firm by name K.S. Agencies in M.G. Road, Trivandrum.
24. According to the prosecution, the sales tax registration number shown on Ext.P10 bill dated 4-11-1989 of K.S. Agencies was really that of Hotel Highway, Trivandrum of which P.W. 10 was the proprietor. Apart from the fact that the sales tax registration number of Highway hotel was not duly proved by either producing any certificate from the Sales Tax office concerned or by summoning the sales tax officer concerned, No attempt was made to produce any bill of Highway Hotel showing that its sales tax registration number was 11111561 which was the number printed on Ext.P10 bill issued by K.S. Agencies. Even according to P.W. 16 the above K.G.S.T. number was printed only in their food bills. No. bill book containing the aforesaid K.G.S.T. number was available with P.W. 16. P.W. 16 who claimed to be the proprietor of the said hotel admitted that he does not remember the door number of the hotel building and could not produce any document to show that he was the owner of the said hotel. P.W. 24 was the Junior Superintendent in the office of the Sales Tax, Ist Circle, Trivandrum during 1991. When the C.B.I. officer asked her about K.S. Agencies, she replied by saying that there was No. such establishment in her Circle and that the said reply was given by her after, verifying the "R" Register. Neither the "R" Register, nor any other authentic document in that behalf was produced before Court, P.W. 24 confessed that the 1st Circle does not cover the whole area of M.G. Road. She also admitted that without perusing the "R" Register she cannot say about the period covered by the "R" Register examined by her. The evidence of P.W. 18 who was the Manager of the Trivandrum Branch of the Punjab and Sind Bank will go to show that K.S. Agencies was not a fictitious concern. It was on being satisfied that K.S. Agencies was an existing concern that he permitted A2 (Thajudheen) to open a current account on 2-11-1989 in the name of K.S. Agencies. Thus, without examining the appropriate persons concerned and without adducing reliable evidence the prosecution could not have canvassed for the position that K.S. Agencies was a fictitious and non-existing firm. When the loan was sanctioned on the strength of adequate collateral security and after conducting proper enquiries and pre-sanction inspection and on the strength of CRs, legal opinion etc. and on the recommendation of P.W. 23, it was not open to the prosecution to contend that A1 was sanctioning the loan dishonestly and without proper verification.
C.C. 11 of 1993:
25. Here the stand of the prosecution was that pursuant to the criminal conspiracy hatched between A1 and A2 (Rajeev) a sum of `1,06,985/- was sanctioned in the name of a non-existent firm by name Deepak Industries being the cost of machineries supplied to Aswathy Wood Industries, Quilon belonging to A2 and Anr. sum of `49,924.81 was sanctioned to P.W. 19 being the cost of a shed allegedly constructed by P.W. 19 for Aswathy Wood Industries. It is the case of the prosecution that No. such shed was constructed as alleged.
26. With regard to the construction of the shed, the trial Judge did not accept the prosecution case and came to the conclusion that a shed was in fact constructed by P.W. 19 (C.K. Prasad) and the amount was validly sanctioned in favour of P.W. 19 and disbursed to him. The trial Judge, however, accepted the prosecution case that Deepak Industries, Kadappakkada, Quilon was a fictitious and non-existent firm and that A1 and A2 cheated the PNB by sanctioning ` 1,06,985/.- in favour of Deepak Industries and disbursing the said amount to Deepak Industries. Ext.P82 is the loan application dated 5-12-1989 of Aswathy Wood Industries owned by A2 (Rajeevan). Ext.P15 is the quotation dated 16-11-1989 for `142,485/- from Deepak Industries for supply of machineries to Aswathy Wood Industries. Ext.P17 is the transfer debit voucher for the margin money of `6,909/-. Ext.P45 is the proprietorship declaration submitted by Rajesh the proprietor of Deepak Industries to P.N.B. This Rajesh is none other than the brother of A2 (Rajeevan). Ext.P85 is the hypothecation agreement executed by Aswathy Wood Industries on 5-12-1989. Ext.P88 is the consent letter by Aswathy Wood Industries authorising PNB to initiate revenue recovery or any other proceedings against them to recover the loan amount in the event of any default. Ext. P92 is the audited balance sheet of Aswathy Wood Industries for the period ending on 29-11-1989 signed by a Chartered Accountant and submitted to PNB. Ext.P96 is the limit proposal dated 5-1-1989 filled by Sri Ayyappan (P.W.23) who has recommended to A1 to sanction the loan. P.W. 23 while recommending the loan had written the following "since the party is having means, recommended" and had signed below that P.W. 23 had further certified that the paid up capital of the firm was Rs. 5,00,000/- and the net income was `4,94,900/- and the proprietor was having nine years experience and his products were having very good local market as well as market in Madras, Bangalore, Gujrat and Tamil Nadu. Ext.P99 is the hypothecation agreement dated 5-12-1989. Ext.P 101 is the legal scrutiny report dated 30-10-1989 in respect of 28 cents of landed property belonging to Rajeevan offered as security to PNB. Advocate Sri. v. Balakrishna Pillai, Quilon had furnished the legal opinion. The very same Advocate had given his legal opinion dated 12-12-1989 regarding 10 cents of property given as additional security. Ext.P102 is the valuation report dated 25-05-1990 prepared by Subrahmanya Iyer at the instance of the Bank Manager.
27. One of the materials relied on by the prosecution to show that Deepak Industries, Kadappakkada, Quilon was a fictitious and non-existing firm was Ext.P113 undelivered registered letter Sent by the CBI Inspector to the said firm and Ext.P 113(a) endorsement by P.W. 21 the postman of Head Post Office, Kollam to the effect the addressee firm was not found. First of all, the addressee in the said letter was not Deepak Industries but was Deepak Agencies. The firm which supplied the machinery was not Deepak Agencies but was Deepak Industries. Hence, if the post man could not find a firm by name Deepak Agencies, that was not surprising. Moreover, P.W.21 has admitted that the place Kadappakkada is within the limits of the Kadappakkada Post Office and not under the Head Post Office, Kollam. P.W.21 further admitted that the area allotted to him from the Head Post Office was a place near to Kadappakada, but not at Kadappakkada. No. postman from Kadappakkada Post Office was either cited or examined.
28. P.W. 5 was the Executive Officer of Vadakkevila Panchayat. He proved Ext.P22 reply dated 20-04-1991 sent by him in reply to the letter sent by the C.B.I. Inspector stating that No. license was issued to Deepak Industries, Kadappakkada from Vadakkevila Panchayath. Similarly, P.W.7 who was the Junior Superintendent of Kilikollur Panchayath proved Ext.P23 reply dated 20-4-1991 addressed by him to the CBI Inspector in answer to the letter sent to him by the CBI asking whether Deepak Industries was functioning in Kilikollur Panchayath area. This witness had replied in the negative. The marking of Exts.P22 and P23 replies was specifically objected to by the defence since according to the defence those reply letters were hit by Section 162 Code of Criminal Procedure But the trial Judge overruled the defence objection and marked those replies. In my view the court below fell into an error in overruling the defence objection and marking Exts.P22 and P23. In Kali Ram v. State of H.P. MANU/SC/0121/1973 : (1973) 2 SCC 808: AIR 1973 SC 2773 a three Judge's Bench of the Supreme Court observed as follows:
The prohibition contained in the section (Section 162 Code of Criminal Procedure) relates to all statements made during the course of an investigation Letter PEEE which was addressed by Sahi Ram to Station House Officer in the nature of narration of what, according to Sahi Ram, he had been told by the accused. Such a letter, in our opinion, would constitute statement for the purpose of Section 162 of the Code of Criminal Procedure. The prohibition relating to the use of a statement made to a police officer during the course of an investigation cannot be set at naught by the police officer not himself recording the statement of a person but having it in the form of a communication addressed by the person concerned to the police officer. If a statement made by a person to a police officer in the course of an investigation is inadmissible except for the purposes mentioned in Section 162, the same would be true of a letter containing narration of facts addressed by a person to a police officer during the course of an investigation. It is not permissible to circumvent the prohibition contained in Section 162 by the investigating officer obtaining a written statement of a person instead of the Investigating Officer himself recording that statement.
In Kanu Ambu Vish v. State of Maharashtra - MANU/SC/0127/1971 : 1971 (1) SCC 503 another three Judges' Bench of the Apex Court held that where the witness was made to write his statement during investigation, it was inadmissible in evidence. In Datar Singh v. State of Punjab - 1975 SCC (Crl) 530 it was observed that annexing the signed statements of alleged eye witnesses to the inquest report was a device adopted by the police to circumvent the bar under Section 162 Code of Criminal Procedure In C. Chenga Reddy v. State of A.P. - MANU/SC/0928/1996 : 1996 SCC (Crl.) 1205: (AIR 1996 SC 3390) it was held that a report submitted by a Government official assisting the investigating officer during the course of investigation and who was examined by the Investigating Officer after the submission of the said report forming part of his statement recorded under Section 161 Code of Criminal Procedure would attract the bar under Section 162 Code of Criminal Procedure
GROUNDS COMMON TO ALL CASES
29. It has already been seen that all loans in these cases were recommended by P.W. 23 (Ayyappan) who conducted the pre-sanction inspections, obtained the necessary legal opinion, prepared the CRs etc. It was acting on his recommendation that A1 sanctioned the loans in good faith. P.W 23 was initially the 2nd accused in the case. It was only at the stage of the final report that his name was deleted from the array of accused and that too without any disclosed reason. Except producing some of the loan documents, the Registers and entire files in connection with the loans were not seized by the Investigating Officer. Ext.P2 (a) statement given by P.W.23 to P.W. 2 and which would exculpate A1 and other accused was not even seen by the Investigating Officer. P. Ws 2 and 3 who had allegedly conducted the preliminary enquiries regarding the alleged irregularities in granting loans were not even questioned by the C.B.I. Ext.P1 complaint was based on the report of P.W. 3 whose preliminary investigation was not full-proof. All the loans were granted on the strength of collateral security. The properties offered as collateral security in each of the loans were valued by one Asokan who was not examined by the prosecution. On behalf of the Bank also one Subrahmania Iyer who had valued the securities was also not examined. The confidential reports which were prepared in each of the loans and which were available in the files when P.W. 10 (who succeeded A1) had taken charge were subsequently removed from the files and suppressed from the Court.
30. The trial Judge also wrongly admitted Ext.P22 and P23 replies which were really hit by Section 162 Code of Criminal Procedure Yet another procedural violation committed by the trial Judge was that the first accused was not permitted to cross examine nine prosecution witnesses namely P.Ws 4, 5, 7, 8, 12, 13, 15, 16 and 20. The specific reason recorded in the depositions of P.Ws 4 and 20 for not allowing A1 to cross-examine the above witnesses was that those witnesses did not speak anything against A1. The learned trial Judge overlooked the fact that the first accused was facing a charge of criminal conspiracy punishable under Section 120B I.P.C. and therefore, he should have been permitted to cross-examine the aforementioned witnesses. Refusal to do so has resulted in prejudice to A1.
31. P.W. 6 was given up by the prosecution after putting two questions to him in chief-examination and after showing him Ext. P12 file but without eliciting any answer from him. The above procedure adopted by the prosecution is to be deprecated (See Hamsa v. State of Kerala. 1966 KLT 136).A witness can be given up before he enters the witness box. Even when a witness enters the witness box and oath is administered to him, it is not too late and he can be asked to withdraw from the witness box. But once chief examination is commenced, the party who calls him cannot give up the witness or withdraw him and thereby deprive the opposite party the right of cross-examination. The practice of the prosecution giving up a witness after the commencement of chief-examination and without tendering the witness for cross-examination is unhealthy, irregular and not warranted by law. (See Lalitha v. Sarangadharan - 1988 (2) KLT 394). In Sukhwant Singh v. State of Punjab - MANU/SC/0305/1995 : AIR 1995 SC 1601 the Apex Court observed as follows: --
Section 138 envisages that a witness would first be examined-in-chief and then subjected to cross-examination and for seeking any clarification, the witness may be reexamined by the prosecution. There is, No. meaning in tendering a witness for cross-examination only. Tendering of a witness for cross-examination, as a matter of fact, amounts to giving up of the witness by the prosecution as it does not choose to examine him in chief. There is No. procedure whereby the prosecution is permitted to tender a witness for cross-examination only, without there being any examination-in-chief in relation to which, such a witness can be cross-examined. The effect of witnesses being tendered only for cross-examination amounts to the failure of the prosecution to examine them at the trial. Their non-examination, in our opinion, seriously affects the credibility of the prosecution case and detracts materially from its reliability.
Thus, the prosecution was not justified in giving up P.W.6. after putting two questions to him in chief-examination.
32. This was an avoidable prosecution if P.W.1 had exercised due care and caution. P.Ws 2 and 3 also did not take pains to personally verify whether the three firms namely, Distributors Quilon, K.S. Agencies and Deepak Industries were really existing or not. The C.B.I. also had the opportunity to conduct a detailed probe into the allegations in Ext.P1 complaint and find out the truth. Instead, they also resorted to unjustifiable modes of collection of evidence to eventually place the accused persons for trial. The amounts involved were also not large enough to justify the investigation and prosecution. The trial Judge also was not alive to the requirements of law while conducting the trial. The Appellants were the unfortunate victims of a concatenation of all the above adverse circumstances.
THE CONCLUSION
33. The conviction entered and the sentence passed against the Appellants overlooking the above vital aspects of the matter cannot be sustained and are accordingly dislodged. The Appellants are found not guilty of the offences punishable under Sections 120B, 420 and 468 I.P.C. and Section 13(2) read with Section 13(1)(d) of the P.C. Act and are acquitted thereunder. They are set at liberty forthwith. Their bail bonds shall stand cancelled.
In the result, these appeals are allowed and the Appellants are acquitted as above.

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