AI Structured Summary
Not yet generated for this judgment
Judgment
M. Karpagavinayagam, J.—The petitioners in all these applications are seeking anticipatory bail apprehending arrest in respect of a case in
Crime No. 22/97 registered under Sections 409, 467 and 471 read with 34 and 109 I.P.C., on the basis of the complaint given by one Mr. G.
Rajappa, Deputy Director of Sericulture, Government Anna Silk Exchange, Kancheepuram, with regard to the charge for misappropriation,
falsification of accounts and forgery of documents.
The facts are these :- The Government of Tamil Nadu have sanctioned a scheme to open a Silk Exchange at Kancheepuram in G.O. Ms. No.
94 Handlooms, Handicrafts, Textiles and Khadi (G-II) Department, dated 14-3-1990. The raw silk produced in these areas is marketed through
Tansilk which procures all silk at fixed price. In order to ensure competitive price in silk marketing, a Silk Exchange in the line of Bangalore Silk
Exchange was though of. The same has been decided to be located at Kancheepuram.
The location of Silk Exchange at Kancheepuram is justified due to arrival of raw and ready silk from the entire State of Kancheepuram and the
availability of more twisters in and around Kancheepuram besides the existences of large number of silk handloom weavers both in co-operative
societies and private sectors in Kancheepuram. This silk will not only provide marketing facility to reelers and twisters, but also will provide
sufficient quantity of silk to all sectors dealing with the silk, thereby reducing the inflow of silk from other State. Therefore, in pursuance of the G.O.
the Silk Exchange at Kancheepuram was established under the Administrative, Supervisory and Technical Control of the Assistant Director of
Sericulture is solely responsible for the administration conduct of the silk business and day-do-day affairs of the Silk Exchange.
The Head of Silk Exchange of the staff, viz., Deputy Director, Assistant Director, Inspectors of Sericulture, Junior Inspectors, Accountant,
Watchman and casual labourers. The Silk Exchange shall maintain a bank account in the name of the ""Assistant Director of Sericulture,
Kancheepuram."" A current account will be maintained to deal with silk sales jointly operated by Assistant Director of Sericulture and Inspector of
Sericulture.
The following is the procedure that has been followed by the Silk Exchange :
The reelers (sellers) will supply raw silk at the Exchange in the morning hours. After receipt of the raw silk, the same will be entered by the
Inspector at the Gate Register and a card will be opened in the name of reeler with the number of Member, Passbook''s name, place, variety, etc.
The sample of the silk will be sent for test.
After receiving the result of the test, the raw silk will be placed on the table on the same day after fixing the flow of price for auction. The twisters,
the purchasers will participate in the auction.
After bidding for the highest price, the same would be entered in the card by the second Inspector. After deducting the commission of 75% of the
price of raw silk, he would prepare the bill with four copies, one for reeler, another for twister, the third for Accounts Department and the last will
be counterfoil.
The twister will be given a card along with the bill to be taken to the Accounts Department. There, the twister will pay the amount and take away
the raw silk. If there is a Bank guarantee available for the twister, after clarifying the balance position at the Accounts Department, he can take
away the goods.
If the auction rate is not agreed by the reeler, the seller and he is not able to get the desired rate, he will be permitted to keep the silk in the store
room. The Silk Exchange will have storage facility in the store room on free of cost for seven days from the date of entry into the Exchange. A hire
charge will be collected beyond 30 days.
The unsuccessful seller in the auction, who is permitted to store the unsold raw silk in the store room can avail Key Loan through Nationalised
Bank, based on the stock deposited by him in the Silk Exchange.
The reelers could avail the Key Loan of 75% of the deposit of the raw silk from the Indian Overseas Bank, after obtaining relevant vouchers or the
cheques from the Silk Exchange. If the said raw silk is sold in the subsequent auction, the Silk Exchange would give cheques to the reelers so that
the reelers will go to Indian Overseas Bank and collect the balance amount, after allowing the Indian Overseas Bank to deduct the 75% of the loan
that he obtained earlier.
In the case of twisters on the basis of the Bank guarantee, the Silk Exchange could sell the raw silk auctioned to the twisters by allowing them to
avail loan for purchasing of the said auctioned raw silk, without exceeding the guaranteed limits. It has to be watched as to whether the Bank
guarantees are alive. No loan should be given without Bank Guarantee.
But, instead of following the above procedure, from 1991 to 1996 the concerned officials of the Silk Exchange have committed various
irregularities, which resulted in the loss of Rs. 1,29,14,781/-. The reelers even after obtaining the loan of 75% on the same day on which the raw
silk was sold in auction were allowed to withdraw the sale amount from some other Bank without showing that they have already availed the loan
of 75%.
The Official of the Silk Exchange have allowed huge loan amount to the twisters for purchase of raw silk sold in auction exceeding the
guaranteed limits and some of the twisters, who did not have Bank guarantee were given huge amount of the loan.
Therefore, a Special Officer, Tansilk, Kancheepuram, was directed to conduct an enquiry with regard to the above irregularities and submit a
report. Accordingly, he conducted a thorough enquiry and reported that there is a prima facie case with regard to the offences in the transaction of
Government Anna Silk Exchange, Kancheepuram, involving the loss to the Government to the tune of Rs. 1,29,14,781/-.
On the basis of this report, the above referred complaint has been given by the Deputy Director of Sericulture, Kancheepuram, against the
former Deputy Director, four Inspectors of Sericulture, one casual labourer and reelers and twisters, which was registered for the offences referred
to above.
According to the prosecution, out of 1630 Key Loans availed by the reelers from 1991 to 1996, a sum of Rs. 11,13,49/- remains to be
realised from 61 reelers. The twisters were provided with financial assistance over and above the guaranteed limit, resulting in excessive release of
funds for a multifold quantum. Due to this, Rs. 1,17,87,466/- which is exclusive of interest is to be realised from the various twisters.
Under the non-bank guarantee system, 9 twisters were extended credit facilities without any Bank guarantee and out of these nine, a sum of
Rs. 13,821/- still remains to be cleared from the two of the twisters, viz., Umapathy and Shanmugam, which is also exclusive of interest.
The investigation so far made discloses that the petitioner in Crl.O.P. No. 14429 of 1997, Robert Michael and the petitioner in Crl.O.P. No.
14743 of 1997, Selvamani have issued cheques towards the payment of Key Loan settlement after striking the word ''Keyloan'' and changing the
name of the paying branches, thereby allowed the reelers to collect the amount from some other branch without allowing the Indian Overseas Bank
to collect the Key Loan obtained by the said reelers.
Some cheques have been signed by A1 Selvaraj, Deputy Director and A2 Robert Michael and other cheques by A2 Robert Michael and A5
Selvamani. All the cheques have been filled up by Gopalakrishnan, a casual labourer, the petitioner in Crl.O.P. No. 14755 of 1997, and he also
filled up cheques issuing Register.
Under the Bank guarantee system, the twisters should not be given loan exceeding the guaranteed limit. The perusal of the records would
reveal that A2 Robert Michael, petitioner in Crl.O.P. No. 14429 of 1997, A3 Ram Kumar, petitioner in Crl.O.P. No. 14746 of 1997, A4
Panneerselvam, petitioner in Crl.O.P. No. 14374 of 1997 and A5 Selvamani, petitioner in Crl.O.P. No. 14743 of 1997, all are the Inspector,
issued loans of huge amounts to twisters more than the bank guarantee limit several times. Besides this, A1 to A5 have issued loans to twisters
without Bank guarantee many times.
As indicated above, the investigation so far made reveals as follows : As per the procedure, the reelers, if they are not able to get the required
rate at the auction, will deposit the same in the storage house. On deposit, they have also obtained 75% of the loan on the basis of the vouchers
issued by the Inspectors from the Indian Overseas Bank. This amount has to be deducted after the raw silk is sold in the auction. But, in this case,
the Inspectors not only allowed the reelers to get the 75% of the Keyloan, but also auctioned the raw silk on the same date and gave cheques to
the reelers for the entire amount permitting them to withdraw the cash in some other Banks by making corrections and also striking out the word
keyloan"".
In this case, 12 Banks other than the Indian Overseas Bank form where keyloan facilities were obtained by the reelers, were approached and
the cheques issued by the Inspectors were encashed by the reelers. Thus, the Inspectors knowing fully well that the reelers obtained loan facilities
from the Indian Overseas Bank, Kancheepuram, without deducting the same, have issued the cheques for entire amount. This would show that the
Inspectors have not conducted themselves as public servants and they have acted dishonestly causing wrongful loss to the Department, probably to
obtain gain for themselves, which is quite serious in nature.
As far as A6 Gopalakrishnan, the petitioner in Crl.O.P. No. 14755 of 1997, is concerned, with the connivance of the other accused, the
Deputy director and the Inspectors, he filled up all the cheques, which were issued to the reelers. Moreover, it is brought to the notice of this Court
that the Deputy Director one Selvaraj, who is A1 and Gopalakrishnan, who was working as a casual labourer made attempted to make the
corrections in the Registers even during the course of investigation.
On behalf of the Inspectors, it was argued by the respective counsel that they were not responsible for the above said irregularities and the
Deputy Director alone was responsible and that their correspondence with the Department would show that they are innocent.
The above submission does not appeal to me, since the report submitted by the Special Officer and the statements of the witnesses would
reveal that this calculated fraud by making forgery of documents has been committed for about six years by all the officials concerned with their
connivance (A1 to A6).
As rightly objected by the Government Advocate, the petitioners, the Inspectors and Casual Labourer, have to be examined under a custodial
interrogation.
Therefore, the petitions for anticipatory bail, namely Crl.O.P. Nos. 14429, 14746, 14374, 14743 and 14755 of 1997 filed by the officials do
not have any merits and the same are dismissed.
As far as the other petitioners in Crl.O.P. Nos. 14479, 14491, 14487, 14749, 14582, 14484 and 15049 of 1997 are concerned, I feel that
they stand in a different footing. Admittedly, the petitioners Anitha, P. S. Raja, G. Kumar, G. Raja R. Sivakumar and Megavannan obtained loans
more than the guaranteed limit by the Bank. The petitioners Umapathy and Shanmugam obtained loans without any Bank guarantee.
After the registration of the case, as per the records produced by the Public Prosecutor, they have paid the portion of the amount and they
have also given undertaking that they would pay the balance amount as per the accounts without fail. The details of their loan amounts and balance
are shown below :-
In view of their undertaking and their conduct of beginning the process of repaying the amounts, I feel that they may be granted anticipatory
bail.
The petitioners in Crl.O.P. Nos. 14479, 14491, 14487, 14749, 14582, 14484 and 15049 of 1997 shall be enlarged on bail, in the event of
arrest, on each of them executing a bond for the sum with sureties, as mentioned below, each for a like sum to the satisfaction of Additional Chief
Metropolitan Magistrate, Egmore, as far as the petitioners in Crl.O.Ps. 14479, 14491, 14487, 14749 and 14484 of 1997 are concerned, Judicial
Magistrate-I, Salem for the petitioner in Crl. O.P. No. 14582 of 1997 and Judicial Magistrate-I, Arni for the petitioners in Crl.O.P. No. 15049 of
1997 and on further condition that they shall report before the respondent daily at 10.00 a.m. until further orders :
Order accordingly.