http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: SRINIVASA REDDY,V

       Vs.

RESPONDENT: STATE OF ANDHRA PRADESH

DATE OF JUDGMENT:       05/02/1998

BENCH: S.P. KURKUKAR, K.T. THOMAS

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T S.P.KURDUKAR, J.      This 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. 2.   The 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. 3.   The prosecution case in short is as under :      The 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. 4.   It 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

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. 5.   It 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. 6.   The 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 acquitted. 7.   The 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. 8.   The  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. 9.   The High Court in its judgment observed : <sls>      "Thus, 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

    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". 10.  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. 11.  We 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 the prosecution. 12.  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. We have  gone through these decisions and in our opinion the same are clearly distinguishable on facts. 13.  It 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. 14.  In 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.