Reddy, V Vs. State of Andhra
Pradesh  INSC 71
(5 February 1998)
Kurkukar, K.T. Thomas S.P.Kurdukar, J.
Criminal Appeal by Special Leave is filed by the accused/appellant challenging
the legality and correctness of the judgment and order dated 11.10.1993 passed
by the Andhra Pradesh High Court remanding the matter back to the Special Judge
for disposal in accordance with law in the light of the observations made in
the said judgment.
accused/appellant was put up for trial before the Special Judge for CBI cases
to answer the charges framed under Section 420, 477A IPC and Section 5(2) read
with Section 5(1) (a) of the prevention of Corruption Act. The Special Judge on
conclusion of the trial and on appreciation of oral and documentary evidence on
record by his judgment and order dated March 16, 1991 acquitted the accused of all the
charges. This order to acquittal was challenged by the State of Andhra Pradesh
in Criminal Appeal and the said Criminal Appeal was allowed by the High Court
vide its impugned judgment and remanded the matter back to the trial court.
This judgment and order passed by the Andhra Pradesh High Court is the subject
matter of challenge in this appeal.
prosecution case in short is as under :
appellant was working as a Branch Manager of Union Bank of India, Koratla
during the period from 20.10.84 to 12.5.86 and while working in the said
capacity no cheated the bank by falsifying the account of the bank showing that
the amount of Rs. 5,09,000/- was advanced as loan to 13 persons against their
Fixed Deposit Receipts (FDRs) or Deposit Re-investment Certificates (DRCs)
without the knowledge of those depositors and obtained Demand Drafts either in favour
of M/s Hall Mark Tobacco Co.. or M/s I.T.C. Ltd.. in respect of those loan
accounts and delivered th ose demand drafts to one U. Koteswara Rao, Balaji
Enterprises, Kareemnagar and thereby derived monetary advantages by cheating
the bank and falsifying the account of the banks.
is further alleged by the prosecution that in respect of two instances the
appellant sent loan proceeds to one accounts of U. Koteswara Rao by sending
telegraphic transfer to Nizamabad branch of Union Bank of India to clear certain loans taken by
him. While sanctioning the loan, the appellant prepared debit vouchers in
respect of loan accounts opened and secured loan ledger corresponding credit
vouchers for issuing Demand Drafts without receiving any application for loan
from the parties and without taking the Original FDRs of DRICs as securities
for the loans which were essential for sanction of such loans. Thus the
appellant has abused his position as a public servant and obtained the
advantages to himself to the tune of Rs.5,09,000/- and caused loss to the bank.
It is not necessary to set out the details of these 13 loan transactions
sanctioned by the accused/appellant against FDRs/ DRICs.
may also be stated that although the inspection of the bank was carried out by
its Auditors in 1984 and 1985 but no such lapses were noticed in their reports.
However, in 1986 when the bank was again inspected, the Auditor submitted his
report Ex. P-74 referring to the several irregularities noticed by him during
inspection. On the basis of this report a complaint was lodged which was
investigated and a charge-sheet came to be filed against the accused/appellant
for the offence mentioned hereinabove.
appellant admitted that he was working as a Branch Manager during the relevant
period but denied that he had committed any offence. He also pleaded that the
Statutory Audit Report submitted in the year 1984 and 1985 did not disclose any
lapse or irregularity on his part and, therefore, he could not be prosecuted on
the basis of 1986 Report. He, therefore, pleaded that he is innocent and he be
prosecution examined as many as 25 witnesses and produced various documents in
support of its case. The appellants. However, did not lead any evidence in
support of his defence.
trial court after considering the oral and documentary evidence on record found
that the prosecution has filed to establish any offence against the appellant
and accordingly acquitted him of all the charges. The High Court on appeal by
the State of Andhra
Pradesh allowed the
said appeal and remanded the matter back to the trial court for disposal in
accordance with law.
High Court in its judgment observed :
in may opinion the trial Judge has failed to consider the relevant material for
ascertaining accused. The trial Judge should have tried to ascertain whether
the accused. The trial Judge should have tried to ascertain whether the persons
in whose names the secured loans against deposits were sanctioned, had in fact
such deposits either in Union Bank of India at Koratla or in any branch of that bank. If so, whether such depositor
had in fact applied for and obtained any loan against such deposit. What is the
procedure to be followed in case such loans are granted and whether the same
has been followed by the accused in sanctioning these loans. It should also
have been ascertained whether these deposits are discharged and if so, whether
those deposit receipts are available with the Bank and should also have
ascertained whether any such deposit receipts were under bank lien at any time.
But, unfortunately the trial Judge did not address himself to any of these
questions before deciding the cases, I, therefore, feel that it is just and
proper to remand the case for fresh disposal".
From the judgment of the trial court it appears that both the reports submitted
by the Auditor in the year 1984- 85 did n to mention any of such lapse and
irregularity in the loan transactions and therefore, the prosecution ought to
have looked into the earlier audit reports before filing the charge-sheet
against the appellant. In our opinion the approach of the trial court was n to
legally sustainable and the High Court had very rightly observed that the trial
Judge should have considered the evidence adduced during the trial to find out
the guilt or otherwise of the appellant.
have gone through the judgment of the trial court wherein the trial Judge
discussed the oral evidence adduced by the prosecution. In our opinion, the
evidence of the material witnesses was considered in a most perfunctory manner
and it had over-looked various other circumstances which were relied upon by
Mr. T.S.Arunachalam. Learned Sr. Counsel appearing in support of this Criminal
Appeal urged that the High Court has committed a serious illegality while
setting aside the order of acquittal and remanding the matter back to the trial
court. According to him the High Court by remanding the matter to the trial
court has afforded in opportunity to the prosecution to cure the lacunas in its
evidence. In support of this submission he relied upon the decision of this
Court in Ukha Kolhe vs. State of Maharashtra 1964 (1) SCR 926 and Mohd, Ahmed vs. Staste of A.P. 1979
(4) SCC 172.
have gone through these decisions and in our opinion the same are clearly distinguishable
was then urged by Mr. Arunachalam that if the High Court felt that further
evidence was necessary for disposal of the case then it could have exercised
its power under Section 391 Cr. P.C. and ought bot to have set aside the order
of acquittal and remanded the matter for fresh disposal. This argument also did
not impress us because the High Court instead of recording the additional
evidence in terms of Section 391 Cr. P.C.; preferred to remand the matter back
to the trial court for disposal in accordance with law. It also appears from
the record that some of the documents including FDRs, loan applications etc.,
should also have been brought on record for effective disposal of the
controversy raised in the case and to do justice between the parties. It is
needless to say that the trial court will strictly adhere to the observations
and directions given by the High Court in its judgment.
t he result the appeal fails and is dismissed. The trial court will, however
dispose of the matter as expeditiously as possible preferably within six months
from the date of the receipt of the order and the record. The Registry is
directed to send the record to the trial court at an early dose.