Case Note & Summary
The Supreme Court allowed the appeal filed by the Central Bureau of Investigation (CBI) against the judgment of the High Court which had discharged the respondent, Srinivas D. Sridhar, who was the Chairman and Managing Director of the Central Bank of India at the relevant time. The case arose from a charge sheet filed in connection with FIR RC 7/E/2014 registered with the CBI (Bank Securities and Fraud Cell), Mumbai, for offences under Sections 420, 468, 471 and 120-B of the Indian Penal Code (IPC) and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 (PC Act). The charge sheet alleged that during 2010-2011, the Bank sanctioned three credit facilities to M/s Electrotherm (India) Limited: a short-term loan of Rs. 50 crores, a letter of credit limit of Rs. 100 crores, and an Export Packing Credit (EPC) facility of Rs. 330 crores. The Bank disbursed Rs. 247.50 crores under the EPC facility, but instead of using the amount for procuring raw materials for a project in Tanzania, the company transferred the funds to its accounts with other banks and to builders, causing a loss of Rs. 436.74 crores to the Bank. The respondent was accused no. 7. The Special Judge rejected his discharge application, but the High Court, in revision, discharged him. The CBI appealed to the Supreme Court. The Supreme Court held that the High Court had conducted a mini-trial at the stage of framing of charges, which is impermissible. The Court noted that the material in the charge sheet, including the allegations that the respondent along with other accused hurriedly prepared and signed a Memorandum for the EPC facility without proper appraisal and without a written request from the company, prima facie showed his involvement in the conspiracy and criminal misconduct. The Court emphasized that at the charge stage, only a strong suspicion based on the material is required, and the veracity of allegations cannot be gone into. The Supreme Court set aside the High Court's judgment and restored the charges against the respondent, directing the trial court to proceed with the trial.
Headnote
A) Criminal Procedure - Framing of Charges - Standard of Proof - At the stage of framing of charges, the court is not required to conduct a mini-trial or assess the veracity of allegations; a strong suspicion based on material in the charge sheet is sufficient to frame charges. - Code of Criminal Procedure, 1973, Section 227, 228 - The High Court discharged the respondent by conducting a mini-trial and evaluating the evidence, which is impermissible at the charge stage. The Supreme Court held that the material in the charge sheet, including allegations of undue haste and deviation from procedure, prima facie showed the respondent's involvement in conspiracy and criminal misconduct. (Paras 8-14) B) Prevention of Corruption Act - Criminal Misconduct - Abuse of Official Position - Section 13(1)(d) read with 13(2) of Prevention of Corruption Act, 1988 - Even without allegation of pecuniary benefit, a public servant can be guilty of criminal misconduct if he abuses his official position to cause wrongful loss to the government or wrongful gain to another. - The respondent, as Chairman and Managing Director, signed the Memorandum for sanctioning EPC facility without proper appraisal and in undue haste, which prima facie constituted abuse of official position. (Paras 6, 14) C) Indian Penal Code - Conspiracy - Section 120-B of Indian Penal Code, 1860 - For conspiracy, it is not necessary that all co-conspirators know every detail or participate from inception; a common intention can be inferred from acts of the accused. - The respondent's act of signing the Memorandum on the same day it was prepared, along with other accused, indicated his participation in the conspiracy to cheat the Bank. (Paras 6, 14)
Issue of Consideration
Whether the High Court erred in discharging the respondent-accused at the stage of framing of charges by conducting a mini-trial and ignoring the prima facie material in the charge sheet.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the charges against the respondent. The trial court was directed to proceed with the trial in accordance with law.
Law Points
- Standard for framing charges
- Prima facie case
- Mini-trial at charge stage
- Conspiracy
- Criminal misconduct by public servant
- Abuse of official position
