Crl.A.No.2298 of 2010

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.2298 OF 2010

Mayank N Shah …..Appellant

Versus

State of Gujarat & Anr. …..Respondents

J U D G M E N T

R. Subhash Reddy, J.

1. This criminal appeal is filed by the accused no.4, aggrieved by the

judgment dated 16.10.2008, passed in Criminal Appeal No.324 of 1987,

by the High Court of Gujarat at Ahmedabad, confirming the judgment

and order of conviction dated 02.04.1987 passed by the learned Special

Judge, Ahmedabad in Special Case No.13 of 1979.

2. On 21.07.1976, a complaint was lodged by Divisional Manager,

Central  Bank of India,  Ahmedabad with the Superintendent of Police,

Central  Bureau  of  Investigation,  Ahmedabad  against  the

appellant/accused no.4 and four others which came to be registered as

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C.R. No.43  of  1976.   It  was alleged in  the complaint  that  M/s.  New

Russian  Automobiles  is  a  registered  partnership  firm engaged  in  the

business  of  manufacturing  crank-shafts  for  jeeps,  ambassador  cars,

tractors, diesel engines etc., from their manufacturing unit at plot bearing

no.155,  C1-B/3  situated  in  Industrial  Area,  Naroda  Taluka  of

Ahmedabad  District.   It  was  alleged  that  during  the  relevant  time

accused no.1 was serving as Branch Manager of Central Bank of India,

Ahmedabad, whereas accused nos.2 and 3 were partners of M/s. New

Russian  Automobiles  along  with  two  others.   As  per  the  complaint,

appellant herein/accused no.4 was at the relevant time serving as Chief

Manager (Operations) with the firm and accused no.5 was serving as

office Superintendent.  It was further stated in the complaint that original

accused no.2 applied to the Central Bank of India for availing certain

loan facilities for the firm.  Accordingly, various facilities such as Term

Loan facility, Cash Credit Open Loan facility, Usance Bills facility, Clean

Endorsed Out-stationed Third Parties Cheques Discounting facility etc.

were  extended  from  time  to  time  at  the  instance  of  accused  no.1.

According to the complainant, accused no.2 apart from being a partner

in the partnership firm, had also floated three other fictitious proprietary

concerns at Bombay, i.e., (i) M/s. Technical Export Import Association;

(ii) M/s. Alloy Steel Corporation; and (iii) M/s. Auto Parts Centre.  It was

further the case of the complainant that under the Usance Bills facility,

the partnership firm used to offer its bills drawn on different outstation

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parties and along with the said bills they have produced railway receipt,

motor receipt, invoices for the value of the goods sold to the parties and

also the hundis drawn upon the purchases and all the said documents

were signed by accused nos.2 to 5.  On such presentation, bank used to

grant credit facility by forwarding the bills with necessary documents to

the out-stationed bankers named in the bill and the out-stationed parties

used to accept the hundis for the value of goods sent along with the bill

and  the  out-stationed  bank  used  to  deliver  to  the  said  party  railway

receipt  or  motor  receipt  along  with  the  invoices.   As  stated  in  the

complaint, the out-stationed parties then used to pay up the amount of

hundis to  their  partner  within  the  time fixed  by the  hundis and  such

bankers  used  to  send  necessary  amount  to  the  Central  Bank,

Gheekanta Branch, Ahmedabad.  It was the allegation in the complaint

that all the accused persons hatched a conspiracy to cheat the bank and

they managed to get fake motor receipts alleged to have been issued by

one Bombay General Freight Carriers Pvt. Ltd., Bombay.  As alleged in

the complaint, the appellant/accused no.4 and accused no.5 presented

to the bank 25 bills for the total amount of Rs.18,57,064.40 during the

period from October 1975 to March 1976 and in the said manner, the

firm has availed the credit facility from the bank against such bills, by

presenting fake transport receipts.  It is alleged that on certain occasions

forged  receipts  were  produced  with  Out-stationed  Bills  Discounted

(O.B.D.) and Bills Purchased (B.P.) and in all  25 bills were presented

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with forged motor transport  receipts  and out of the said bills,  11 bills

totalling to Rs.6,02,160/- were drawn upon a fictitious firm, namely, M/s.

Auto Parts Centre, of which accused no.2 was the sole proprietor.  It is

alleged,  the  accused  nos.2  to  5  by  making  false  or  misleading

representation with fraudulent and dishonest inducement,  cheated the

bank to the tune of Rs.18,57,064.40.  It was also alleged that accused

nos.2  to  5  made  false  declaration  about  the  value  of  the  goods  by

drawing  bills  in  favour  of  fictitious  firms.   Further,  M/s.  Alloy  Steel

Corporation,  a  fictitious  firm  floated  by  accused  no.2,  raised  11

fabricated invoices in the name of the firm amounting to Rs.44,19,000/-

and fraudulently and dishonestly induced the said bank to advance the

amount of Rs.30,93,300/-.  In the complaint it is alleged that accused

no.1 being a public servant, managed to get credited, at the instance of

accused no.2,  an amount  of Rs.9500/- in the account  of his sons on

28.11.1975  and  Rs.5400/-  on  11.02.1976.   In  addition  to  the  same,

accused no.1 accepted a wrist watch, Crown T.V. set and enjoyed a trip

to Bombay at the expense of accused nos.2 and 3, as such, committed

the offence punishable under Section 161 and 165 of the Indian Penal

Code (IPC).

3. After  completion  of  the  investigation  on  the  complaint,  all  the

accused were charged for the offences punishable under Sections 161,

166,  420,  468  and  471,  IPC read  with  Sections  5(1)(d)  and  5(2)  of

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Prevention of Corruption Act, 1947.  All the accused pleaded not guilty

to the charges and claimed trial.

4. The prosecution has examined in all 44 witnesses apart from the

documentary evidence.  On appreciation and evaluation of the evidence

on record adduced by the prosecution both oral as well as documentary,

the learned Special Judge held the appellant is guilty for the offences

charged  and  imposed  the  sentence  for  the  various  offences,  which

reads as under :  

“R.I. for a period of two years for the offence punishable under S.120B read with S.161, 166, 420, 471 of I.P. Code and also read with S.5(1)(d) further read with S.5(2) of the Prevention of Corruption Act, 1947.

R.I. for a period of two years and to pay fine of Rs.5000/-, in default to suffer further R.I. for period of six months for the  offence  punishable  under  sec.420,420-120B  of  I.P. Code.

R.I. for a period of one year and to pay a fine of Rs.2000, in default to suffer further R.I. for period of three months for the offence punishable under S.471 read with S.468 of I.P. Code  in  respect  of  the  user  of  seven  forged  motor transport receipts.  

R.I. for a period of one year and to pay a fine of Rs.2000. in default to suffer further R.I. for period of three months for the offence punishable under S.471 read with S.468 and further read with S.120B of I.P. Code in respect of the user of the 11 Photostat copies of exhs.942 to 952.”

5. Aggrieved by the conviction recorded and sentence imposed, the

appellant herein preferred criminal appeal before the High Court.  High

Court, by re-appreciating the evidence on record, dismissed the appeal

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by impugned judgment, confirming the judgment and order of sentence

imposed on the appellant, by the learned Special Judge, Ahmedabad.

6. We have heard Sri Basava Prabhu Patil, learned senior counsel

appearing  for  the  appellant  and  Ms.  Sonia  Mathur,  learned  senior

counsel appearing for the C.B.I.

7. It is contended by learned senior counsel for the appellant that the

appeal  was  decided  by  the  High  Court  without  giving  adequate

opportunity,  to  the  appellant  to  present  his  case  on  merits.   It  is

submitted that during the pendency of the appeal, before the High Court,

the advocate who has presented the appeal on behalf of the appellant

was  elevated  as  the  Judge  of  the  High  Court  and  thereafter  notice

issued by the High Court was not received by the appellant, as he has

shifted  to  Pune  and  the  High  Court  has  disposed  of  the  appeal  by

appointing amicus curiae, who was no other than junior advocate of the

counsel for the C.B.I.  In view of the same, it is submitted that it is a fit

case to remand the matter to the High Court.  Further it is submitted that

conviction of the appellant  is solely based on circumstantial  evidence

and the  appellant  was the  salaried  employee of  the  firm working  as

Chief Manager (Operations).  He was not benefitted in any manner and

he was submitting the bills and invoices as per the instructions of the

accused no.2.  That the companies which were floated by the accused

no.2  were  his  proprietary  concerns.   It  is  submitted  that  he  was

preparing the invoices and bills  during  his  routine  office work on the

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basis of information received from the factory and submitted to the bank.

It  is submitted that in absence of  any direct  evidence connecting the

appellant  to the alleged illegalities the High Court  as well  as the trial

court fell in error in recording conviction of the appellant for the offence

alleged.

8. On  the  other  hand,  learned  senior  counsel  appearing  for  the

respondents has submitted that the appellant/accused no.4 was working

as Chief Manager (Operations) with M/s. New Russian Automobiles and

he had drawn almost all O.B.D. and B.P. bills on behalf of the firm.  It is

submitted that from the documentary evidence placed on record, it  is

amply  clear  that  appellant  was very  well  knowing that  the bank was

being deceived by showing highly inflated amounts in the O.B.D. bills.  It

is submitted that appellant has signed all the bills which were submitted

along with forged receipts to the bank.  Further it is stated that he has

attested all the 11 photocopies of exhibits 942 to 952 as true copies of

the  forged  invoices  issued  by  M/s.  Alloy  Steel  Corporation.   It  is

submitted, thus the appellant herein was party to the offence of cheating

and forgery upon the bank.   

9. Having heard learned counsel on both sides, we have perused the

judgments of the trial court, as well as High Court.

10. On appreciation of oral and documentary evidence on record, trial

court/Special Court has convicted the accused nos.1 to 4, and the High

Court by the impugned judgment confirmed the conviction and sentence

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imposed on the appellant.  When the advocate on record who filed the

appeal was elevated to the Bench, it was for the appellant to make his

own arrangement for appointing another advocate in the place of earlier

advocate on record.   Appellant did not take any steps in this regard.

Even notice sent to the appellant was not received by him for want of

correct  address.  As such there was no option except to proceed for

disposal  of  the  appeal  filed  by  the  appellant,  by  appointing  amicus

curiae.  On the mere allegation of the appellant that the amicus curiae

appointed was earlier junior counsel of C.B.I. advocate, is no ground to

interfere  with  the  impugned  judgment.   Having  perused  the  findings

recorded by the trial court/Special Court and of the High Court, we are of

the  view  that  the  findings  recorded  in  support  of  the  case  of  the

prosecution were in conformity with the oral and documentary evidence

on record.  We are satisfied from the findings recorded that the appellant

knowing fully well that the invoices/bills were fake and fabricated, were

presented on behalf of the firm to the bank and thus cheated the bank.

The prosecution  has proved the guilt  of  the appellant  herein  beyond

reasonable doubt to record conviction of the appellant.

11. Though  the  learned  counsel  for  the  appellant  relied  on  the

judgments in the case of Central Bureau of Investigation, Hyderabad v.

K.  Narayana  Rao1; K.R.  Purushothaman v.  State  of  Kerala2;  Bharati

Telenet Ltd. V. Subhash Jain & Ors.3; and A.S. Krishnan & Ors. V. State

1  (2012) 9 SCC 512 2  (2005) 12 SCC 631 3  (2005) 11 SCC 599

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of Kerala4, having regard to facts of the case and evidence on record, of

the case on hand, we are of the view that the said judgments are not

helpful in support of the case of the appellant.

13. Having regard  to  totality  of  the facts  and circumstances  of  the

case and evidence on record, taking note of the fact that the appellant

was working in the firm owned by the accused no.2 and he was salaried

employee, we deem it appropriate,  it is a fit case to modify the sentence

imposed on the appellant, while confirming the conviction. This Court, in

State of Madhya Pradesh v. Udham and Others5, has clearly laid down

guidelines for sentencing. In assessing the sentencing, the crime test

requires us to evaluate and provide adequate deference to factors such

as role of the accused and his position within the rank of conspirators,

among  other  things.  There  is  no  dispute  that,  from  the  facts  and

circumstances, the appellant was working in the firm owned by accused

no.2  and  he  was  relatively  lower  in  the  hierarchy.  It  needs  to  be

highlighted  that  he  was  only  a  salaried  employee.  Accordingly,  we

modify  the  sentence of  R.I.  for  a  period  of  one year  for  the  offence

punishable under S.120B read with S.161, 166, 420, 471 of I.P. Code

and also read with S.5(1)(d) further read with S.5(2) of the Prevention of

Corruption Act, 1947; R.I. for a period of one year and to pay fine of

Rs.5000/-, in default to suffer further R.I. for period of six months for the

offence punishable  under  sec.420,  420-120B of  I.P.  Code;  R.I.  for  a

4  (2004) 11 SCC 576 5  2019 SCC OnLine SC 1378

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period of  one year and to pay a fine of  Rs.2000,  in  default  to  suffer

further R.I. for period of three months for the offence punishable under

S.471 read with  S.468 of  I.P.  Code in  respect  of  the  user  of  seven

forged motor transport receipts; R.I. for a period of one year and to pay

a fine of  Rs.2000.  in  default  to  suffer  further  R.I.  for  period  of  three

months for  the offence punishable  under  S.471 read with  S.468 and

further read with S.120B of I.P. Code in respect of the user of the 11

Photostat  copies  of  exhs.942  to  952.   We  further  order  that  all  the

sentences shall run concurrently.

14. The appeal is allowed in part to the extent of modifying the period

of sentence.  As the appellant was on bail pursuant to orders passed by

this  Court  on  16.11.2009,  his  bail  bonds  are  cancelled.   He  shall

surrender  within  a  period  of  four  weeks  from  today  to  serve  the

remaining period of sentence, failing which respondent-State shall take

steps to take the accused into custody to serve the remaining period of

sentence.   

….………………………………..J. [N.V. RAMANA]

….………………………………..J. [R. SUBHASH REDDY]

….………………………………..J. [B.R. GAVAI]

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New Delhi. December 18, 2019.

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