Supreme Court Upholds Conviction in Bank Fraud Case: Ram Gopal vs. CBI (22 July 2019)

Date of the Judgment: 22 July 2019

Citation: 2019 INSC 706

Judges: Ashok Bhushan, J., Navin Sinha, J.

Can a bank employee be convicted for fraud based on handwriting evidence and circumstantial evidence, even if the investigation had some gaps? The Supreme Court addressed this question in a case involving a fictitious bank account and fraudulent withdrawals. This case highlights the importance of thorough investigation and the weight of expert evidence in criminal trials. The judgment was delivered by a two-judge bench comprising Justice Ashok Bhushan and Justice Navin Sinha, with the opinion authored by Justice Navin Sinha.

Case Background

The case originated from a First Information Report (F.I.R.) registered by the Central Bureau of Investigation (CBI) on April 12, 1994, based on a complaint by the Assistant General Manager of the State Bank of India, Ghaziabad. The complaint concerned a fictitious bank account opened on July 13, 1992, in the name of one Raj Kumar. Subsequently, between July 23, 1992, and October 31, 1992, forged credit entries totaling Rs. 3,22,056.00 were made into this account. A sum of Rs. 3,22,000.00 was then withdrawn through seventeen cheques, leaving a balance of Rs. 322.85.

Initially, two bank clerks, Dinesh Kumar Sharma and Smt. Vandana Kundra, were named as accused, along with other unknown individuals. However, during the investigation, the names of the appellants, Ram Gopal and Pankaj Kumar Jain, came to light. The charge sheet was filed against them, and after the trial, they were convicted.

Timeline

Course of Proceedings

The trial court convicted the appellants, Ram Gopal and Pankaj Kumar Jain, based on the evidence presented by the prosecution. The appellants then appealed to the Supreme Court, challenging their conviction.

Legal Framework

The appellants were convicted under the following provisions:

• Section 120B of the Indian Penal Code, 1860, which deals with criminal conspiracy.
• Section 420 of the Indian Penal Code, 1860, which deals with cheating and dishonestly inducing delivery of property.
• Section 467 of the Indian Penal Code, 1860, which deals with forgery of valuable security, will, etc.
• Section 468 of the Indian Penal Code, 1860, which deals with forgery for purpose of cheating.
• Section 471 of the Indian Penal Code, 1860, which deals with using as genuine a forged document or electronic record.
• Section 477A of the Indian Penal Code, 1860, which deals with falsification of accounts.
• Section 201 of the Indian Penal Code, 1860, which deals with causing disappearance of evidence of offence, or giving false information to screen offender.
• Section 13(1)(d) of the Prevention of Corruption Act, 1988, which deals with criminal misconduct by a public servant.
• Section 13(2) of the Prevention of Corruption Act, 1988, which deals with punishment for criminal misconduct.

Arguments

Arguments by the Appellants:

• The appellants argued that they were made scapegoats, while the original accused were wrongly exonerated during the investigation.
• They contended that the sanction for their prosecution was not in accordance with the law.
• There was no evidence that they were involved in the opening of the fictitious account.
• They claimed that no evidence was presented to support the charge of criminal conspiracy.
• It was argued that they could not have destroyed evidence related to the account opening form or made forged entries in the ledger.
• The handwriting expert’s report was merely an opinion, and their own expert doubted the handwriting and signatures attributed to them.
• They stated that no action was taken against the bank employees responsible for opening the fictitious account.
• The appellants claimed that they did not receive the withdrawals made through bearer cheques, as acknowledged by PW-3.

Arguments by the Central Bureau of Investigation (CBI):

• The CBI argued that there was a thorough evaluation of evidence, including the handwriting experts’ reports.
• They contended that the charges against the appellants were proven.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in a separate section. However, the core issue before the court was whether the evidence presented by the prosecution was sufficient to uphold the conviction of the appellants for the alleged offences.

Treatment of the Issue by the Court

The following table demonstrates how the Court dealt with the issues:

Authorities

The Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The evidence of PW-1 and PW-2* was accepted to prove the validity of the sanction for prosecution.
• The evidence of Sub. Inspector, Central Bureau of Investigation PW-23* was accepted to prove that the appellants gave specimen writing and signatures.
• The evidence of Principal Scientific Officer, C.F.S.L., PW-18* was accepted to establish that the account opening form and withdrawal cheques were in the handwriting of the appellants.
• The report of handwriting expert DW-1* was rejected as it was based on photocopies and not original specimen signatures.

What weighed in the mind of the Court?

The Court was primarily influenced by the following factors:

• The systematic nature of the fraud, which indicated a well-planned conspiracy.
• The handwriting evidence, which directly linked the appellants to the forgery.
• The fact that the appellants were bank employees with access to records and knowledge of banking procedures.
• The appellants’ failure to raise objections to the prosecution’s handwriting expert report during the trial.

Fact:Law

The Court’s reasoning was based on a combination of factual findings (such as the handwriting evidence and the systematic nature of the fraud) and legal principles (such as the burden of proof in criminal cases and the admissibility of expert evidence). The factual aspects weighed slightly more heavily in the Court’s decision, as the evidence directly linked the appellants to the crime.

The Court considered the appellants’ arguments that they were scapegoats and that the investigation had gaps. However, it found that the evidence against the appellants was sufficient to establish their guilt. The Court noted that while the investigation might not have been perfect, this did not negate the evidence that was available. The Court emphasized that the fraud was committed in a systematic manner by individuals familiar with banking procedures, and the appellants were employees of the bank.

The Court quoted the following from the judgement:

“The trial court has rightly observed that in accordance with banking procedures, the opening of the account, the deposits in the same and withdrawals could not have been the handiwork of the appellants alone.”

“The fraud was committed in a systematic manner by persons well acquainted with banking procedures.”

“We therefore find no reason to interfere with the conviction of the appellants.”

There were no dissenting opinions in this case. The decision was unanimous.

Key Takeaways

• Handwriting analysis by experts is a crucial piece of evidence in forgery cases.
• Bank employees can be held liable for fraud if they have access to records and knowledge of banking procedures.
• Even if there are gaps in an investigation, a conviction can be upheld if there is sufficient evidence to establish guilt.
• Systematic fraud indicates criminal conspiracy and can lead to convictions.

Directions

No specific directions were given by the Supreme Court in this case. The appeals were dismissed, and the conviction of the appellants was upheld.

Development of Law

The ratio decidendi of the case is that bank employees can be convicted for fraud if there is sufficient evidence, such as handwriting analysis and circumstantial evidence, even if the investigation has gaps. This case reinforces the importance of thorough investigation and the weight of expert evidence in criminal trials. There is no change in the previous position of law.

Conclusion

The Supreme Court upheld the conviction of Ram Gopal and Pankaj Kumar Jain in a bank fraud case. The Court found that the evidence, particularly the handwriting analysis and the systematic nature of the fraud, was sufficient to establish their guilt. This case highlights the importance of thorough investigation and the weight of expert evidence in criminal trials, even if there are gaps in the investigation.