Bank Fraud and Criminal Conspiracy: Supreme Court Upholds Conviction in SBI Fictitious Account Case

The case of Ram Gopal & Pankaj Kumar Jain v. Central Bureau of Investigation (CBI) involves a banking fraud committed in the State Bank of India (SBI), Ghaziabad, where a fictitious bank account was used for embezzlement. The Supreme Court had to decide whether the conviction of the appellants under Sections 120B, 420, 467, 468, 471, 477-A, and 201 of the IPC read with Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act was justified.

Background of the Case

The Central Bureau of Investigation (CBI) registered an FIR on 12.04.1994 based on a complaint by the Assistant General Manager of SBI, Ghaziabad. The complaint pertained to the opening of a fictitious bank account in the name of one Raj Kumar on 13.07.1992. Between 23.07.1992 and 31.10.1992, Rs. 3,22,056 was deposited in this account through fraudulent credit entries. Seventeen bearer cheques were subsequently used to withdraw Rs. 3,22,000, leaving a balance of Rs. 322.85.

Initially, two bank clerks, Dinesh Kumar Sharma and Smt. Vandana Kundra, were named as accused. However, after investigation, charges were framed against the appellants, Ram Gopal and Pankaj Kumar Jain, and they were convicted by the trial court.

Petitioner’s Arguments

The appellants argued that:

They were scapegoats while the actual accused were let off.
The sanction for prosecution was not in accordance with the law.
No evidence directly linked them to the opening of the fictitious account.
No conspiracy was proven between them and the actual account holder.
The prosecution failed to produce documentary evidence linking them to the fraudulent credit and debit transactions.
The handwriting expert’s report merely provided an opinion, which was disputed by their own expert (DW-1).
No action was taken against SBI employees responsible for verifying the account, indicating that the investigation was incomplete.

Respondent’s Arguments

The CBI countered that:

A thorough investigation had established the appellants’ involvement.
The appellants’ handwriting was found on several documents related to the fraudulent transactions.
Expert analysis confirmed that the appellants forged the signature of the fictitious account holder.
The account was opened without following banking procedures, implicating the appellants.
There was substantial circumstantial evidence proving conspiracy and fraud.

Supreme Court’s Observations

The Supreme Court examined the material evidence and found that:

A fictitious account was opened in SBI, Ghaziabad, without proper verification.
The investigation did not fully explore how the account was initially approved, but this lapse did not exonerate the appellants.
There was clear evidence linking the appellants to the fraudulent activities.
Banking procedures indicated that account opening, deposits, and withdrawals involved multiple individuals.
Ram Gopal and Pankaj Kumar Jain were SBI employees and had access to records necessary to execute the fraud.

The Court observed:

“The fraud was committed in a systematic manner by persons well acquainted with banking procedures. The appellants were bank employees and had access to records essential to commit the offence.”

The prosecution presented evidence that:

The fictitious account opening form was in the handwriting of appellant Pankaj Kumar Jain.
The cheque book and passbook were received by him impersonating Raj Kumar.
Ram Gopal’s handwriting was found on multiple withdrawal cheques used to siphon money from the fraudulent account.
Out of the 17 forged cheques, all were signed by Pankaj Kumar Jain.

Final Judgment

The Supreme Court upheld the appellants’ conviction and dismissed the appeal, ruling that:

The evidence clearly established conspiracy, forgery, and fraud.
The appellants’ involvement in opening and operating the fictitious account was proven beyond reasonable doubt.
Handwriting evidence, bank records, and circumstantial proof left no room for doubt.
The appellants were guilty under the IPC and Prevention of Corruption Act.

Impact of the Judgment

This ruling has significant implications for financial crimes:

Reinforces the accountability of bank employees in fraud cases.
Upholds the reliability of handwriting expert opinions in criminal trials.
Establishes the importance of strict compliance with banking procedures.
Demonstrates that incomplete investigations do not absolve proven accused persons.

Conclusion

The Supreme Court’s decision sends a strong message about financial fraud in the banking sector. By upholding the convictions, the Court reinforced the need for vigilance in financial institutions and strict adherence to procedural safeguards. This ruling ensures that those involved in fraudulent banking activities face legal consequences, strengthening the integrity of banking systems in India.

Petitioner Name: Ram Gopal & Pankaj Kumar Jain.
Respondent Name: Central Bureau of Investigation, Dehradun.
Judgment By: Justice Ashok Bhushan, Justice Navin Sinha.
Place Of Incident: Ghaziabad, Uttar Pradesh.
Judgment Date: 22-07-2019.

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