Top Court dismisses SLPs filed by 2 accused in cheating and corruption case involving bank officials; grants them 2 weeks’ time to surrender
Justices C.T. Ravikumar and Rajesh Bindal [03-05-2024]

Read Order: T.R. VIJAYARAMAN AND ORS v. THE STATE OF TAMIL NADU [SC- SPECIAL LEAVE PETITION (CRIMINAL) NO. 3787 OF 2024]

LE Correspondent

New Delhi, May 7, 2024: The Supreme Court has upheld the conviction of the petitioners in a cheating and corruption case after noting that all the accused in connivance with the officers of Srirangam Branch of Indian Bank at Trichy submitted cheques of the accounts in which there was no balance and fraudulent entries were made to the tune of over Rs one crore.

The proceedings, in this case, arose out of a common FIR registered by the Central Bureau of Investigation (C.B.I.) under Section 120-B, read with Sections 420, 477(A) of IPC and Section 13(2), read with Section 13(1)(d) of Prevention of Corruption Act,1988 at Chennai. It was a case in which fraudulent transactions were made by the accused in connivance with the officers working at that time in Indian Bank at Srirangam Branch, Trichy.

The two petitioners in the SLPs were the proprietor of M/s Kumaran Silks and a partner in M/s Sri Ganesh Godown. In the FIR, there are a total 14 accused out of which 4 are bank officials and 10 are private businessmen.

The allegations against the accused were that the bank officers had made certain unauthorized debits in external clearing account and local drafts accounts and the said amount were credited to different parties accounts to offset the unauthorized temporary Demand Overdraft allowed earlier. The transactions were done in September 2002. The result was interest free advance to the petitioners. 

Inspection was carried out by the senior officers of the bank in 2004 and it was noticed that certain debit entries were made in the external clearing account and credited in the accounts of the petitioner. These could be made only if any negotiable instrument was submitted for clearing. However, no such instrument was submitted. Even the temporary overdraft granted to the parties was not reported to the head office. After the inspection, the fraudulent entries were pointed out to the tune of Rs. 1,10,66,100 in the case of 10 borrowers including the petitioners. Immediately on the next date, the payment got deposited by the manager of the bank. The Trial Court convicted the petitioners, and the conviction was upheld by the High Court.Thus, the petitioners approached the Top Court.

After going through the submission of the parties, the Division Bench of Justice C.T. Ravikumar and Justice Rajesh Bindal did not find that any case was made out for grant of leave to appeal. “As already noticed above it is a case where bank officers and the private businessmen, two of whom are petitioners before this court, had cheated the bank”, the Bench said while adding that the fraud started in the year 2002, when without there being any instrument submitted to the bank for clearance from the accounts in which there was no balance, entries were made in the external clearing account and local drafts account for giving credit to the petitioners. 

The entries were made in 2002 for clearing of overdraft of about Rs. 20 lakhs granted to the petitioner/T.R. Vijayaraman from July, 2002 onwards, immediately, after the petitioner opened his current account with the bank. 

The modus operandi having come to the notice of the higher officers, inspection of the branch was carried out and when confronted the accused persons got the amount deposited immediately on the next day. It came out in the report that advance was enjoyed by the petitioners without payment of any interest. It was not a loan transaction as was sought to be argued.

The manner in which the entries were made in the accounts also could not be disputed. The amount deposited by the petitioners after the inspection was to the tune of Rs. 20.05 lakhs and Rs. 21.45 lakhs respectively. The Bench also rejected the argument that the petitioners did not have any control over the bank officials in the manner in which the entries were made in the books of accounts. 

“All the accused in connivance with each other have cheated the bank, by submitting cheques of the accounts in which there was no balance, or without any submission thereof and entries by the bank officers in the books of account showing them to be pending for clearing and giving credit to the account holder/accused”, the Bench stated.

Thus, noting that no case was made out for grant of leave to appeal, the Bench dismissed the Special Leave Petitions and directed the petitioners surrender before the concerned Trial Court within 2 weeks.