MAYANK N SHAH versus STATE OF GUJARAT & ANR. on 18 December 2019

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[2019] 15 S.C.R. 358

SUPREME COURT REPORTS

[2019] 15 S.C.R.

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MAYANK N SHAH

v.

STATE OF GUJARAT & ANR.

(Criminal Appeal No. 2298 of 2010)

BDECEMBER 18, 2019

[N. V. RAMANA, R. SUBHASH REDDY ANDB. R. GAVAI, JJ.]

Sentence/Sentencing – Complaint lodged against theappellant-accused no.4 and four others – At the relevant time,Caccused no.1 was serving as Branch Manager of Central Bankof India, Ahmedabad– Accused nos.2, 3 were partners of apartnership firm engaged in the business of manufacturing crank-shafts for jeeps, ambassador cars etc.– Appellant was serving asChief Manager (Operations) with the firm and accused no.5 wasDoffice Superintendent– Accused no.2 applied to the Bank foravailing loan facilities for the firm – Case of the complainant interalia that under the Usance Bills facility, the partnership firm usedto offer its bills drawn on different outstation parties and alongwith the said bills they produced railway receipt, motor receipt,invoices for the value of the goods sold to the parties and alsoEthe hundis drawn upon the purchases – Said documents weresigned by accused nos.2-5– On such presentation, the bank usedto grant credit facility – Allegedly, forged receipts were producedwith Out-stationed Bills Discounted (O.B.D) and Bills Purchased(B.P) and in all, the appellant and accused no.5 presented to theFBank 25 bills to the tune of Rs.18,57,064.40/-, and the firm availedthe credit facility from the Bank against such bills, by presentingfake transport receipts – Accused charged u/ss.161, 166, 420, 468& 471, IPC r/w ss.5(1)(d), 5(2) of 1947 Act – Special Judgeconvicted the accused nos.1-4 – High Court confirmed theconviction and sentences imposed on the appellant –On appeal,Gheld: Findings recorded supporting the prosecution case were inconformity with the oral and documentary evidence on record –Appellant knowing fully well that the invoices/bills were fake andfabricated, presented on behalf of the firm to the bank and thuscheated the bank – Prosecution proved the guilt of the appellantH

beyond reasonable doubt – However, in assessing the sentencing,the crime test requires adequate deference to factors such as roleof the accused and his position within the rank of conspirators,among other things – In view of the fact that the appellant wasonly a salaried employee working in the firm owned by the accusedno.2 and was relatively lower in the hierarchy, it is fit case tomodify the sentence imposed on the appellant, while confirmingthe conviction – Period of sentence modified – All the sentencesto run concurrently – Bail bonds of the appellant cancelled, whoshall surrender within 4 weeks from today, failing which steps betaken to take him into custody for serving the remaining period ofsentence – Penal Code, 1860 – ss.120-B, 161, 166, 420, 468 and471 – Prevention of Corruption Act, 1947 – ss.5(1)(d), (2).

Partly allowing the appeal, the Court

HELD: 1.1 When the advocate on record who filed theappeal was elevated to the Bench, it was for the appellant tomake his own arrangement for appointing another advocate inthe place of earlier advocate on record. Appellant did not takeany steps in this regard. Even notice sent to the appellant wasnot received by him for want of correct address. As such therewas no option except to proceed for disposal of the appeal filedby the appellant, by appointing amicus curiae. Mere allegationthat the amicus curiae appointed was earlier junior counsel ofC.B.I. advocate, is no ground to interfere with the impugnedjudgment. The findings recorded in support of the case of theprosecution were in conformity with the oral and documentaryevidence on record. The appellant knowing fully well that theinvoices/bills were fake and fabricated, were presented on behalfof the firm to the bank and thus cheated the bank. Theprosecution has proved the guilt of the appellant beyondreasonable doubt to record conviction of the appellant. [Para 10][365-D-G]

1.2 Having regard to totality of the facts and circumstancesof the case and evidence on record, taking note of the fact thatthe appellant was working in the firm owned by the accused no.2,he was salaried employee and and he was relatively lower in thehierarchy. it is a fit case to modify the sentence imposed on theappellant, while confirming the conviction. In assessing the AB

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Asentencing, the crime test requires us to evaluate and provideadequate deference to factors such as role of the accused andhis position within the rank of conspirators, among other things.Accordingly, the sentence of R.I. modified for a period of oneyear 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) furtherBread 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 defaultto suffer further R.I. for period of six months for the offencepunishable under sec.420, 420-120B of I.P. Code; R.I. for aperiod of one year and to pay a fine of Rs.2000, in default to sufferCfurther R.I. for period of three months for the offence punishableunder S.471 read with S.468 of I.P. Code in respect of the userof seven forged motor transport receipts; R.I. for a period ofone year and to pay a fine of Rs.2000. in default to suffer furtherR.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. CodeDin respect of the user of the 11 Photostat copies of exhs.942 to952. All the sentences shall run concurrently. The appeal isallowed in part to the extent of modifying the period of sentence.As the appellant was on bail pursuant to orders passed bySupreme Court on 16.11.2009, his bail bonds are cancelled. HeEshall surrender within a period of four weeks from today to servethe remaining period of sentence, failing which respondent-Stateshall take steps to take the accused into custody to serve theremaining period of sentence. [Paras 13, 14] [366-B-G; 367-A-B]FCentral Bureau of Investigation, Hyderabad v.K. Narayana Rao (2012) 9 SCC 512 : [2012] 9 SCR54 ; K.R. Purushothaman v. State of Kerala (2005) 12SCC 631 : [2005] 4 Suppl. SCR 498 ; Bharati TelenetLtd. v. Subhash Jain & Ors. (2005) 11 SCC 599 ; A.S.Krishnan & Ors. v. State of Kerala (2004) 11 SCCG576 : [2004] 3 SCR 44 – referred to.

State of Madhya Pradesh v. Udham and Others 2019SCC OnLine SC 1378 – relied on.

Case Law Reference

H[2012] 9 SCR 54referred to

Para 11

CRIMINAL APPELLATE JURISDICTION : Criminal AppealNo. 2298 of 2010.

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From the Judgment and Order dated 16.10.2008 of the HighCourt of Gujarat at Ahmedabad in Criminal Appeal No. 324 of 1987.

Basava Prabhu S. Patil, Sr. Adv., Gaurav Agarwal, Jatin Zaveri,Neel Kamal Mishra, Geet Ahuja, Chinmay Deshpande, Advs. for theAppellant.

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Ms. Sonia Mathur, Sr. Adv., Ashish Rana, Puneet Taneja, SushilKumar Dubey, Ms. Divya Nair, Anuj Aggarwal, Puneet Pathak,Ms. Laxmi Kumari, Ms. Aastha Mehta, Ms. Vishakha, Aniruddha P.Mayee, Advs. for the Respondents.

The Judgment of the Court was delivered by D

R. SUBHASH REDDY, J.

1. This criminal appeal is filed by the accused no.4, aggrievedby the judgment dated 16.10.2008, passed in Criminal Appeal No.324of 1987, by the High Court of Gujarat at Ahmedabad, confirming thejudgment and order of conviction dated 02.04.1987 passed by the learnedSpecial Judge, Ahmedabad in Special Case No.13 of 1979.

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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 C.R.No.43 of 1976. It was alleged in the complaint that M/s. New RussianAutomobiles is a registered partnership firm engaged in the businessof 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 AhmedabadDistrict. It was alleged that during the relevant time accused no.1 wasserving as Branch Manager of Central Bank of India, Ahmedabad,whereas accused nos.2 and 3 were partners of M/s. New RussianAutomobiles along with two others. As per the complaint, appellantherein/accused no.4 was at the relevant time serving as Chief Manager(Operations) with the firm and accused no. 5 was serving as office F

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ASuperintendent. It was further stated in the complaint that originalaccused no.2 applied to the Central Bank of India for availing certainloan facilities for the firm. Accordingly, various facilities such as TermLoan facility, Cash Credit Open Loan facility, Usance Bills facility, CleanEndorsed Out-stationed Third Parties Cheques Discounting facility etc.were extended from time to time at the instance of accused no.1.BAccording to the complainant, accused no.2 apart from being a partnerin the partnership firm, had also floated three other fictitious proprietaryconcerns at Bombay, i.e., (i) M/s. Technical Export Import Association;(ii) M/s. Alloy Steel Corporation; and (iii) M/s. Auto Parts Centre. Itwas further the case of the complainant that under the Usance BillsCfacility, the partnership firm used to offer its bills drawn on differentoutstation parties and along with the said bills they have produced railwayreceipt, motor receipt, invoices for the value of the goods sold to theparties and also the hundis drawn upon the purchases and all the said

documents were signed by accused nos.2 to 5. On such presentation,Dbank used to grant credit facility by forwarding the bills with necessarydocuments to the out-stationed bankers named in the bill and the out-stationed parties used to accept the hundis for the value of goods sentalong with the bill and the out-stationed bank used to deliver to the saidparty railway receipt or motor receipt along with the invoices. As statedin the complaint, the out-stationed parties then used to pay up the amountEof hundis to their partner within the time fixed by the hundis and suchbankers used to send necessary amount to the Central Bank, GheekantaBranch, Ahmedabad. It was the allegation in the complaint that all theaccused persons hatched a conspiracy to cheat the bank and theymanaged to get fake motor receipts alleged to have been issued by oneFBombay General Freight Carriers Pvt. Ltd., Bombay. As alleged inthe complaint, the appellant/accused no.4 and accused no.5 presentedto the bank 25 bills for the total amount of Rs.18,57,064.40 during theperiod from October 1975 to March 1976 and in the said manner, thefirm has availed the credit facility from the bank against such bills, bypresenting fake transport receipts. It is alleged that on certain occasionsGforged receipts were produced with Out-stationed Bills Discounted(O.B.D.) and Bills Purchased (B.P.) and in all 25 bills were presentedwith forged motor transport receipts and out of the said bills, 11 billstotalling 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.HIt is alleged, the accused nos.2 to 5 by making false or misleading representation with fraudulent and dishonest inducement, cheated thebank to the tune of Rs.18,57,064.40. It was also alleged that accusednos.2 to 5 made false declaration about the value of the goods bydrawing bills in favour of fictitious firms. Further, M/s. Alloy SteelCorporation, a fictitious firm floated by accused no.2, raised 11fabricated invoices in the name of the firm amounting to Rs.44,19,000/- and fraudulently and dishonestly induced the said bank to advancethe amount of Rs.30,93,300/-. In the complaint it is alleged that accusedno.1 being a public servant, managed to get credited, at the instance ofaccused no.2, an amount of Rs.9500/- in the account of his sons on28.11.1975 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 atrip to Bombay at the expense of accused nos.2 and 3, as such,committed the offence punishable under Section 161 and 165 of theIndian Penal Code (IPC).

3. After completion of the investigation on the complaint, all theaccused were charged for the offences punishable under Sections 161,166, 420, 468 and 471, IPC read with Sections 5(1)(d) and 5(2) ofPrevention of Corruption Act, 1947. All the accused pleaded not guiltyto the charges and claimed trial.

4. The prosecution has examined in all 44 witnesses apart fromthe documentary evidence. On appreciation and evaluation of theevidence on record adduced by the prosecution both oral as well asdocumentary, the learned Special Judge held the appellant is guilty forthe 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 underS.120B read with S.161, 166, 420, 471 of I.P. Code and also readwith S.5(1)(d) further read with S.5(2) of the Prevention ofCorruption Act, 1947.

R.I. for a period of two years and to pay fine of Rs.5000/-, indefault to suffer further R.I. for period of six months for theoffence 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, indefault to suffer further R.I. for period of three months for theoffence punishable under S.471 read with S.468 of I.P. Code inrespect of the user of seven forged motor transport receipts.

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

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B5. 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 theappeal by impugned judgment, confirming the judgment and order ofsentence imposed on the appellant, by the learned Special Judge,Ahmedabad.C

6. We have heard Sri Basava Prabhu Patil, learned senior counselappearing for the appellant and Ms. Sonia Mathur, learned seniorcounsel appearing for the C.B.I.

7. It is contended by learned senior counsel for the appellant thatDthe appeal was decided by the High Court without giving adequateopportunity, to the appellant to present his case on merits. It is submittedthat during the pendency of the appeal, before the High Court, theadvocate who has presented the appeal on behalf of the appellant waselevated as the Judge of the High Court and thereafter notice issuedby the High Court was not received by the appellant, as he has shiftedEto Pune and the High Court has disposed of the appeal by appointingamicus curiae, who was no other than junior advocate of the counselfor the C.B.I. In view of the same, it is submitted that it is a fit case toremand the matter to the High Court. Further it is submitted thatconviction of the appellant is solely based on circumstantial evidenceand the appellant was the salaried employee of the firm working asFChief Manager (Operations). He was not benefitted in any manner andhe was submitting the bills and invoices as per the instructions of theaccused no.2. That the companies which were floated by the accusedno.2 were his proprietary concerns. It is submitted that he was preparingthe invoices and bills during his routine office work on the basis ofGinformation received from the factory and submitted to the bank. It issubmitted that in absence of any direct evidence connecting the appellantto the alleged illegalities the High Court as well as the trial court fell inerror in recording conviction of the appellant for the offence alleged.

8. On the other hand, learned senior counsel appearing for theHrespondents has submitted that the appellant/accused no.4 was working as Chief Manager (Operations) with M/s. New Russian Automobilesand he had drawn almost all O.B.D. and B.P. bills on behalf of thefirm. It is submitted that from the documentary evidence placed onrecord, it is amply clear that appellant was very well knowing that thebank was being deceived by showing highly inflated amounts in theO.B.D. bills. It is submitted that appellant has signed all the bills whichwere submitted along with forged receipts to the bank. Further it isstated that he has attested all the 11 photocopies of exhibits 942 to 952as true copies of the forged invoices issued by M/s. Alloy SteelCorporation. It is submitted, thus the appellant herein was party to theoffence of cheating and forgery upon the bank.

9. Having heard learned counsel on both sides, we have perusedthe 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 theHigh Court by the impugned judgment confirmed the conviction andsentence imposed on the appellant. When the advocate on record whofiled the appeal was elevated to the Bench, it was for the appellant tomake his own arrangement for appointing another advocate in the placeof earlier advocate on record. Appellant did not take any steps in thisregard. Even notice sent to the appellant was not received by him forwant of correct address. As such there was no option except to proceedfor disposal of the appeal filed by the appellant, by appointing amicuscuriae. On the mere allegation of the appellant that the amicus curiaeappointed was earlier junior counsel of C.B.I. advocate, is no groundto interfere with the impugned judgment. Having perused the findingsrecorded by the trial court/Special Court and of the High Court, weare of the view that the findings recorded in support of the case of theprosecution were in conformity with the oral and documentary evidenceon record. We are satisfied from the findings recorded that the appellantknowing fully well that the invoices/bills were fake and fabricated, werepresented on behalf of the firm to the bank and thus cheated the bank.The prosecution has proved the guilt of the appellant herein beyondreasonable doubt to record conviction of the appellant.

11. Though the learned counsel for the appellant relied on thejudgments in the case of Central Bureau of Investigation, 1 (2012) 9 SCC 512

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AHyderabad v. K. Narayana Rao[1]; K.R. Purushothaman v. State ofKerala[2]; Bharati Telenet Ltd. V. Subhash Jain & Ors.[3]; and A.S.Krishnan & Ors. V. State of Kerala[4], having regard to facts of thecase and evidence on record, of the case on hand, we are of the viewthat the said judgments are not helpful in support of the case of theappellant.

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13. Having regard to totality of the facts and circumstances ofthe case and evidence on record, taking note of the fact that theappellant was working in the firm owned by the accused no.2 and hewas salaried employee, we deem it appropriate, it is a fit case to modifyCthe sentence imposed on the appellant, while confirming the conviction.This Court, in State of Madhya Pradesh v. Udham and Others[5], hasclearly laid down guidelines for sentencing. In assessing the sentencing,the crime test requires us to evaluate and provide adequate deferenceto factors such as role of the accused and his position within the rankof conspirators, among other things. There is no dispute that, from theDfacts and circumstances, the appellant was working in the firm ownedby accused no.2 and he was relatively lower in the hierarchy. It needsto 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 offencepunishable under S.120B read with S.161, 166, 420, 471 of I.P. CodeEand also read with S.5(1)(d) further read with S.5(2) of the Preventionof Corruption Act, 1947; R.I. for a period of one year and to pay fineof Rs.5000/-, in default to suffer further R.I. for period of six monthsfor 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 toFsuffer further R.I. for period of three months for the offence punishableunder S.471 read with S.468 of I.P. Code in respect of the user of sevenforged motor transport receipts; R.I. for a period of one year and topay a fine of Rs.2000. in default to suffer further R.I. for period ofthree months for the offence punishable under S.471 read with S.468and further read with S.120B of I.P. Code in respect of the user of theG11 Photostat copies of exhs.942 to 952. We further order that all thesentences shall run concurrently.

2 (2005) 12 SCC 631

3 (2005) 11 SCC 5994 (2004) 11 SCC 576H5 2019 SCC OnLine SC 1378

14. The appeal is allowed in part to the extent of modifying theperiod of sentence. As the appellant was on bail pursuant to orderspassed by this Court on 16.11.2009, his bail bonds are cancelled. Heshall surrender within a period of four weeks from today to serve theremaining period of sentence, failing which respondent-State shall takesteps to take the accused into custody to serve the remaining period ofsentence.

Divya Pandey

Appeal partly allowed.

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