Read the Judgment<\/a><\/p>\n <\/p>\n
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REPORTABLE<\/p>\n
IN THE SUPREME COURT OF INDIA<\/p>\n
CRIMINAL APPELLATE JURISDICTION<\/p>\n
1 CRIMINAL APPEAL NO. 1460 OF 2012<\/p>\n
(Arising out of S.L.P. (Crl.) No. 6975 of 2011)<\/p>\n
Central Bureau of Investigation, Hyderabad …. Appellant(s)<\/p>\n
Versus<\/p>\n
K. Narayana Rao …. Respondent(s)<\/p>\n
2<\/p>\n
J U D G M E N T<\/p>\n
P.Sathasivam,J.<\/p>\n
1) Leave granted.
\n2) This appeal is directed against the final judgment and order dated\u00a009.07.2010 passed by the High Court of Judicature, Andhra Pradesh at\u00a0Hyderabad in Criminal Petition No. 2347 of 2008 whereby the High Court\u00a0allowed the petition filed by the respondent herein under Section 482 of\u00a0the Code of Criminal Procedure, 1973 (in short \u201cthe Code\u201d) and quashed the\u00a0criminal proceedings pending against him in CC No. 44 of 2007 (Crime No. 36\u00a0of 2005) on the file of the Special Judge for CBI cases, Hyderabad.<\/p>\n
3) Brief facts:
\n(a) According to the prosecution, basing on an information, on\u00a030.11.2005, the CBI, Hyderabad registered an FIR being RC 32(A)\/2005\u00a0against Shri P. Radha Gopal Reddy (A-1) and Shri Udaya Sankar (A-2), the\u00a0then Branch Manager and the Assistant Manager, respectively of the Vijaya\u00a0Bank, Narayanaguda Branch, Hyderabad, for the commission of offence\u00a0punishable under Sections 120-B, 419, 420, 467, 468 471 read with Section\u00a0109 of the Indian Penal Code, 1860 (in short \u2018the IPC\u2019) and Section 13(2)\u00a0read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 for\u00a0abusing their official position as public servants and for having conspired\u00a0with private individuals, viz., Shri P.Y. Kondala Rao \u2013 the builder (A-3)\u00a0and Shri N.S. Sanjeeva Rao (A-4) and other unknown persons for defrauding\u00a0the bank by sanctioning and disbursement of housing loans to 22 borrowers\u00a0in violation of the Bank\u2019s rules and guidelines and thereby caused wrongful\u00a0loss of Rs. 1.27 crores to the Bank and corresponding gain for themselves.\u00a0In furtherance of the said conspiracy, A-2 conducted the pre-sanction\u00a0inspection in respect of 22 housing loans and A-1 sanctioned the same.
\n(b) After completion of the investigation, the CBI filed charge sheet\u00a0along with the list of witnesses and the list of documents against all the\u00a0accused persons. In the said charge sheet, Shri K. Narayana Rao, the\u00a0respondent herein, who is a legal practitioner and a panel advocate for the\u00a0Vijaya Bank, was also arrayed as A-6. The duty of the respondent herein as
\na panel advocate was to verify the documents and to give legal opinion.\u00a0The allegation against him is that he gave false legal opinion in respect\u00a0of 10 housing loans. It has been specifically alleged in the charge sheet\u00a0that the respondent herein (A-6) and Mr. K.C. Ramdas (A-7)-the valuer have\u00a0failed to point out the actual ownership of the properties and to bring out\u00a0the ownership details and name of the apartments in their reports and also\u00a0the falsity in the permissions for construction issued by the Municipal\u00a0Authorities.
\n(c) Being aggrieved, the respondent herein (A-6) filed a petition being\u00a0Criminal Petition No. 2347 of 2008 under Section 482 of the Code before the\u00a0High Court of Andhra Pradesh at Hyderabad for quashing of the criminal\u00a0proceedings in CC No. 44 of 2007 on the file of the Special Judge for CBI\u00a0Cases, Hyderabad. By impugned judgment and order dated 09.07.2010, the High\u00a0Court quashed the proceedings insofar as the respondent herein (A-6) is\u00a0concerned.
\n(d) Being aggrieved, the CBI, Hyderabad filed this appeal by way of\u00a0special leave.
\n4) Heard Mr. H.P. Raval, learned Additional Solicitor General for the\u00a0appellant-CBI and Mr. R. Venkataramani, learned senior counsel for the\u00a0respondent (A-6).
\n5) After taking us through the allegations in the charge sheet presented\u00a0before the special Court and all other relevant materials, the learned ASG\u00a0has raised the following contentions:
\n(i) The High Court while entertaining the petition under Section 482 of\u00a0the Code has exceeded its jurisdiction. The powers under Section 482 are\u00a0inherent which are to be exercised in exceptional and extraordinary\u00a0circumstances. The power being extraordinary has to be exercised\u00a0sparingly, cautiously and in exceptional circumstances;
\n(ii) The High Court has committed an error in holding that no material had\u00a0been gathered by the investigating agency against the respondent herein (A-\u00a06) that he had conspired with the remaining accused for committing the\u00a0offence; and
\n(iii) There is no material on record to show that the respondent herein (A-6) did not verify the originals pertaining to housing loans before giving\u00a0legal opinion and intentionally changed the proforma and violated the\u00a0Bank\u2019s circulars.
\n6) On the other hand, Mr. Venkataramani, learned senior counsel for the\u00a0respondent (A-6), after taking us through the charge sheet and the\u00a0materials placed before the respondent seeking legal opinion, submitted\u00a0that he has not committed any offence much less an offence punishable under\u00a0Section 120-B read with Sections 419, 420, 467, 468, 471 and 109 of IPC and\u00a0Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption\u00a0Act, 1988. He further submitted that based on the documents placed, the\u00a0respondent herein after perusing and on satisfying himself, furnished his\u00a0legal opinion for which he cannot be implicated as one of the conspirators\u00a0for the offence punishable under Section 420 read with Section 109 IPC.
\n7) We have carefully perused all the relevant materials and considered\u00a0the rival submissions.
\n8) In order to appreciate the stand of the CBI and the defence of the\u00a0respondent, it is necessary to refer the specific allegations in the charge\u00a0sheet. The respondent herein has been arrayed as accused No. 6 in the\u00a0charge sheet and the allegations against him are as under:
\n\u201cPara 20: Investigation revealed that legal opinions in respect of all\u00a0these 10 loans have been given by Panel Advocate \u2013 Sri K. Narayana Rao\u00a0(A-6) and valuation reports were given by Approved Valuer \u2013 Sri V.C.\u00a0Ramdas(A-7). Both, the advocate and the valuer, have failed to point\u00a0out the actual ownership of the property and failed to bring out the\u00a0ownership details and name of the apartments in their reports. They\u00a0have also failed to point out the falsehood in the construction\u00a0permission issued by the municipal authorities.<\/p>\n
Para 28: Investigation revealed that the municipal permissions
\nsubmitted to the bank were also fake.<\/p>\n
Para 29: Expert of Finger Print Bureau confirmed that the thumb
\nimpressions available on the questioned 22 title deeds pertain to A-3,
\nA-4 and A-5.<\/p>\n
Para 30: The above facts disclose that Sri P. Radha Gopal Reddy (A-1)
\nand Sri M. Udaya Sankar (A-2) entered into criminal conspirary with A-
\n3 and abused their official position as public servants by violating
\nthe bank norms and in the process caused wrongful gain to A-3 to the
\nextent of Rs.1,00,68,050\/- and corresponding wrongful loss to the bank
\nin sanctioning 22 housing loans. Sri P.Y. Kondal Rao(A-3) registered
\nfalse sale deeds in favour of borrowers using impostors as site
\nowners, produced false municipal permissions and cheated the bank in
\ngetting the housing loans. He is liable for conspiracy, cheating,
\nforgery for the purpose of cheating and for using forged documents as
\ngenuine. Sri B. Ramanaji Rao(A-4) and Sri R. Sai Sita Rama Rao(A-5)
\nimpersonated as site owners, executed the false sale deeds. They are
\nliable for impersonation, conspiracy, cheating, forging a valuable
\nsecurity and forgery for the purpose of cheating. Sri K. Narayana Rao
\n(A-6) submitted false legal opinions and Sri K.C. Ramdas(A-7)
\nsubmitted false valuation reports about the genuineness of the
\nproperties in collusion with A-3 for sanction of the loans by Vijaya
\nBank, Narayanaguda branch, Hyderabad and abetted the crime. Sri A.V.
\nSubba Rao(A-8) managed verification of salary slips of the borrowers
\nof 12 housing loans in collusion with A-3 and abetted the crime.<\/p>\n
Para 33: In view of the above, the accused A-1, A-2, A-3, A-4, A-5, A-
\n6, A-7 & A-8 are liable for offences punishable under Section 120-B
\nread with Sections 419, 420, 467, 468, 471 and 109 read with Section
\n420 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention
\nof Corruption Act and substantive offences thereof.\u201d<\/p>\n
With the above details, let us consider whether there is prima facie
\nallegation(s) and material(s) in order to pursue the trial against the
\nrespondent herein. In the same way, we have to see whether the reasoning
\nand the ultimate conclusion of the High Court in quashing the charge sheet
\nagainst the respondent herein (A-6) is sustainable. We are conscious of
\nthe power and jurisdiction of the High Court under Section 482 of the Code
\nfor interfering with the criminal prosecution at the threshold.
\n9) Mr. Raval, learned ASG in support of his contentions relied on the
\nfollowing decisions:
\ni) State of Bihar vs. Ramesh Singh, (1977) 4 SCC 39;
\nii) P. Vijayan vs. State of Kerala and Another, (2010) 2 SCC 398; and
\niii) Sajjan Kumar vs. Central Bureau of Investigation, (2010) 9 SCC 368.
\n10) The first decision Ramesh Singh (supra) relates to interpretation of
\nSections 227 and 228 of the Code for the considerations as to discharge the
\naccused or to proceed with trial. Para 4 of the said judgment is pressed
\ninto service which reads as under:
\n\u201c4. Under Section 226 of the Code while opening the case for the
\nprosecution the Prosecutor has got to describe the charge against the
\naccused and state by what evidence he proposes to prove the guilt of
\nthe accused. Thereafter comes at the initial stage the duty of the
\nCourt to consider the record of the case and the documents submitted
\ntherewith and to hear the submissions of the accused and the
\nprosecution in that behalf. The Judge has to pass thereafter an order
\neither under Section 227 or Section 228 of the Code. If \u201cthe Judge
\nconsiders that there is no sufficient ground for proceeding against
\nthe accused, he shall discharge the accused and record his reasons for
\nso doing\u201d, as enjoined by Section 227. If, on the other hand, \u201cthe
\nJudge is of opinion that there is ground for presuming that the
\naccused has committed an offence which\u2014 \u2026 (b) is exclusively triable
\nby the Court, he shall frame in writing a charge against the accused\u201d,
\nas provided in Section 228. Reading the two provisions together in
\njuxtaposition, as they have got to be, it would be clear that at the
\nbeginning and the initial stage of the trial the truth, veracity and
\neffect of the evidence which the Prosecutor proposes to adduce are not
\nto be meticulously judged. Nor is any weight to be attached to the
\nprobable defence of the accused. It is not obligatory for the Judge at
\nthat stage of the trial to consider in any detail and weigh in a
\nsensitive balance whether the facts, if proved, would be incompatible
\nwith the innocence of the accused or not. The standard of test and
\njudgment which is to be finally applied before recording a finding
\nregarding the guilt or otherwise of the accused is not exactly to be
\napplied at the stage of deciding the matter under Section 227 or
\nSection 228 of the Code. At that stage the Court is not to see whether
\nthere is sufficient ground for conviction of the accused or whether
\nthe trial is sure to end in his conviction. Strong suspicion against
\nthe accused, if the matter remains in the region of suspicion, cannot
\ntake the place of proof of his guilt at the conclusion of the trial.
\nBut at the initial stage if there is a strong suspicion which leads
\nthe Court to think that there is ground for presuming that the accused
\nhas committed an offence then it is not open to the Court to say that
\nthere is no sufficient ground for proceeding against the accused. The
\npresumption of the guilt of the accused which is to be drawn at the
\ninitial stage is not in the sense of the law governing the trial of
\ncriminal cases in France where the accused is presumed to be guilty
\nunless the contrary is proved. But it is only for the purpose of
\ndeciding prima facie whether the Court should proceed with the trial
\nor not. It the evidence which the Prosecutor proposes to adduce to
\nprove the guilt of the accused even if fully accepted before it is
\nchallenged in cross-examination or rebutted by the defence evidence,
\nif any, cannot show that the accused committed the offence, then there
\nwill be no sufficient ground for proceeding with the trial. An
\nexhaustive list of the circumstances to indicate as to what will lead
\nto one conclusion or the other is neither possible nor advisable. We
\nmay just illustrate the difference of the law by one more example. If
\nthe scales of pan as to the guilt or innocence of the accused are
\nsomething like even, at the conclusion of the trial, then, on the
\ntheory of benefit of doubt the case is to end in his acquittal. But
\nif, on the other hand, it is so at the initial stage of making an
\norder under Section 227 or Section 228, then in such a situation
\nordinarily and generally the order which will have to be made will be
\none under Section 228 and not under Section 227.\u201d<\/p>\n
11) Discharge of accused under Section 227 of the Code was extensively
\nconsidered by this Court in P. Vijayan (supra) wherein it was held as
\nunder:<\/p>\n
\u201c10. \u2026\u2026. If two views are possible and one of them gives rise to
\nsuspicion only, as distinguished from grave suspicion, the trial Judge
\nwill be empowered to discharge the accused and at this stage he is not
\nto see whether the trial will end in conviction or acquittal. Further,
\nthe words \u201cnot sufficient ground for proceeding against the accused\u201d
\nclearly show that the Judge is not a mere post office to frame the
\ncharge at the behest of the prosecution, but has to exercise his
\njudicial mind to the facts of the case in order to determine whether a
\ncase for trial has been made out by the prosecution. In assessing this
\nfact, it is not necessary for the court to enter into the pros and
\ncons of the matter or into a weighing and balancing of evidence and
\nprobabilities which is really the function of the court, after the
\ntrial starts.<\/p>\n
11. At the stage of Section 227, the Judge has merely to sift the
\nevidence in order to find out whether or not there is sufficient
\nground for proceeding against the accused. In other words, the
\nsufficiency of ground would take within its fold the nature of the
\nevidence recorded by the police or the documents produced before the
\ncourt which ex facie disclose that there are suspicious circumstances
\nagainst the accused so as to frame a charge against him.\u201d<\/p>\n
12) While considering the very same provisions i.e., framing of charges
\nand discharge of accused, again in Sajjan Kumar (supra), this Court held
\nthus:
\n\u201c19. It is clear that at the initial stage, if there is a strong
\nsuspicion which leads the court to think that there is ground for
\npresuming that the accused has committed an offence, then it is not
\nopen to the court to say that there is no sufficient ground for
\nproceeding against the accused. The presumption of the guilt of the
\naccused which is to be drawn at the initial stage is only for the
\npurpose of deciding prima facie whether the court should proceed with
\nthe trial or not. If the evidence which the prosecution proposes to
\nadduce proves the guilt of the accused even if fully accepted before
\nit is challenged in cross-examination or rebutted by the defence
\nevidence, if any, cannot show that the accused committed the offence,
\nthen there will be no sufficient ground for proceeding with the trial.<\/p>\n
20. A Magistrate enquiring into a case under Section 209 CrPC is not
\nto act as a mere post office and has to come to a conclusion whether
\nthe case before him is fit for commitment of the accused to the Court
\nof Session. He is entitled to sift and weigh the materials on record,
\nbut only for seeing whether there is sufficient evidence for
\ncommitment, and not whether there is sufficient evidence for
\nconviction. If there is no prima facie evidence or the evidence is
\ntotally unworthy of credit, it is the duty of the Magistrate to
\ndischarge the accused, on the other hand, if there is some evidence on
\nwhich the conviction may reasonably be based, he must commit the case.
\nIt is also clear that in exercising jurisdiction under Section 227
\nCrPC, the Magistrate should not make a roving enquiry into the pros
\nand cons of the matter and weigh the evidence as if he was conducting
\na trial.<\/p>\n
Exercise of jurisdiction under Sections 227 and 228 CrPC<\/p>\n
21. On consideration of the authorities about the scope of Sections
\n227 and 228 of the Code, the following principles emerge:
\n(i) The Judge while considering the question of framing the charges
\nunder Section 227 CrPC has the undoubted power to sift and weigh the
\nevidence for the limited purpose of finding out whether or not a prima
\nfacie case against the accused has been made out. The test to
\ndetermine prima facie case would depend upon the facts of each case.
\n(ii) Where the materials placed before the court disclose grave
\nsuspicion against the accused which has not been properly explained,
\nthe court will be fully justified in framing a charge and proceeding
\nwith the trial.
\n(iii) The court cannot act merely as a post office or a mouthpiece of
\nthe prosecution but has to consider the broad probabilities of the
\ncase, the total effect of the evidence and the documents produced
\nbefore the court, any basic infirmities, etc. However, at this stage,
\nthere cannot be a roving enquiry into the pros and cons of the matter
\nand weigh the evidence as if he was conducting a trial.
\n(iv) If on the basis of the material on record, the court could form
\nan opinion that the accused might have committed offence, it can frame
\nthe charge, though for conviction the conclusion is required to be
\nproved beyond reasonable doubt that the accused has committed the
\noffence.
\n(v) At the time of framing of the charges, the probative value of the
\nmaterial on record cannot be gone into but before framing a charge the
\ncourt must apply its judicial mind on the material placed on record
\nand must be satisfied that the commission of offence by the accused
\nwas possible.
\n(vi) At the stage of Sections 227 and 228, the court is required to
\nevaluate the material and documents on record with a view to find out
\nif the facts emerging therefrom taken at their face value disclose the
\nexistence of all the ingredients constituting the alleged offence. For
\nthis limited purpose, sift the evidence as it cannot be expected even
\nat that initial stage to accept all that the prosecution states as
\ngospel truth even if it is opposed to common sense or the broad
\nprobabilities of the case.
\n(vii) If two views are possible and one of them gives rise to
\nsuspicion only, as distinguished from grave suspicion, the trial Judge
\nwill be empowered to discharge the accused and at this stage, he is
\nnot to see whether the trial will end in conviction or acquittal.\u201d<\/p>\n
From the above decisions, it is clear that at the initial stage, if there
\nis a strong suspicion which leads the Court to think that there is ground
\nfor presuming that the accused has committed an offence, in that event, it
\nis not open to the Court to say that there is no sufficient ground for
\nproceeding against the accused. A judicial magistrate enquiring into a
\ncase under Section 209 of the Code is not to act as a mere post office and
\nhas to arrive at a conclusion whether the case before him is fit for
\ncommitment of the accused to the Court of Session. He is entitled to sift
\nand weigh the materials on record, but only for seeing whether there is
\nsufficient evidence for commitment, and not whether there is sufficient
\nevidence for conviction. On the other hand, if the Magistrate finds that
\nthere is no prima facie evidence or the evidence placed is totally unworthy
\nof credit, it is his duty to discharge the accused at once. It is also
\nsettled law that while exercising jurisdiction under Section 227 of the
\nCode, the Magistrate should not make a roving enquiry into the pros and
\ncons of the matter and weigh the evidence as if he was conducting a trial.
\nThis provision was introduced in the Code to avoid wastage of public time
\nand to save the accused from unavoidable harassment and expenditure. While
\nanalyzing the role of the respondent herein (A-6) from the charge sheet and
\nthe materials supplied along with it, the above principles have to be kept
\nin mind.
\n13) In Rupan Deol Bajaj (Mrs.) and Another vs. Kanwar Pal Singh Gill and
\nAnother, (1995) 6 SCC 194, this Court has considered the scope of quashing
\nan FIR and held that it is settled principle of law that at the stage of
\nquashing an FIR or complaint, the High Court is not justified in embarking
\nupon an enquiry as to the probability, reliability or genuineness of the
\nallegations made therein. By noting the principles laid down in State of
\nHaryana vs. Bhajan Lal, 1992 Supp (1) SCC 335, this Court held that an FIR
\nor a complaint may be quashed if the allegations made therein are so absurd
\nand inherently improbable that no prudent person can ever reach a just
\nconclusion that there is sufficient ground for proceeding against the
\naccused.
\n14) In Mahavir Prashad Gupta and Another vs. State of National Capital
\nTerritory of Delhi and Others, (2000) 8 SCC 115, this Court considered the
\njurisdiction of the High Court under Section 482 of the Code and held as
\nunder:<\/p>\n
\u201c5. The law on the subject is very clear. In the case of State of
\nBihar v. Murad Ali Khan (1988) 4 SCC 655 it has been held that
\njurisdiction under Section 482 of the Code of Criminal Procedure has
\nto be exercised sparingly and with circumspection. It has been held
\nthat at an initial stage a court should not embark upon an inquiry as
\nto whether the allegations in the complaint are likely to be
\nestablished by evidence or not. Again in the case of State of Haryana
\nv. Bhajan Lal 1992 Supp. (1) SCC 335 this Court has held that the
\npower of quashing criminal proceedings must be exercised very
\nsparingly and with circumspection and that too in the rarest of rare
\ncases. It has been held that the court would not be justified in
\nembarking upon an inquiry as to the reliability or genuineness or
\notherwise of the allegations made in the FIR or the complaint. It has
\nbeen held that the extraordinary or inherent powers did not confer an
\narbitrary jurisdiction on the court to act according to its whim or
\ncaprice.<\/p>\n
15) Regarding conspiracy, Mr. Raval, learned ASG after taking us through
\nthe averments in the charge sheet based reliance on a decision of this
\nCourt in Shivnarayan Laxminarayan Joshi and Others vs. State of
\nMaharashtra, (1980) 2 SCC 465 wherein it was held that once the conspiracy
\nto commit an illegal act is proved, act of one conspirator becomes the act
\nof the other. By pointing out the same, learned ASG submitted that the
\nrespondent herein (A-6), along with the other conspirators defrauded the
\nBank\u2019s money by sanctioning loans to various fictitious persons.
\n16) We have already extracted the relevant allegations and the role of
\nthe respondent herein (A-6). The only allegation against the respondent is
\nthat he submitted false legal opinion to the Bank in respect of the housing
\nloans in the capacity of a panel advocate and did not point out actual
\nownership of the properties. As rightly pointed out by Mr. Venkataramani,
\nlearned senior counsel for the respondent, the respondent was not named in
\nthe FIR. The allegations in the FIR are that A-1 to A-4 conspired together
\nand cheated Vijaya Bank, Narayanaguda, Hyderabad to the tune of Rs. 1.27
\ncrores. It is further seen that the offences alleged against A-1 to A-4 are
\nthe offences punishable under Sections 120B, 419, 420, 467, 468 and 471 of
\nIPC and Section 13(2) read with Section 13 (1)(d) of the Prevention of
\nCorruption Act, 1988. It is not in dispute that the respondent is a
\npracticing advocate and according to Mr. Venkataramani, he has experience
\nin giving legal opinion and has conducted several cases for the banks
\nincluding Vijaya Bank. As stated earlier, the only allegation against him
\nis that he submitted false legal opinion about the genuineness of the
\nproperties in question. It is the definite stand of the respondent herein
\nthat he has rendered Legal Scrutiny Reports in all the cases after perusing
\nthe documents submitted by the Bank. It is also his claim that rendition
\nof legal opinion cannot be construed as an offence. He further pointed out
\nthat it is not possible for the panel advocate to investigate the
\ngenuineness of the documents and in the present case, he only perused the
\ncontents and concluded whether the title was conveyed through a document or
\nnot. It is also brought to our notice that LW-5 (Listed Witness), who is
\nthe Law Officer of Vijaya Bank, has given a statement regarding flaw in
\nrespect of title of several properties. It is the claim of the respondent
\nthat in his statement, LW-5 has not even made a single comment as to the
\nveracity of the legal opinion rendered by the respondent herein. In other
\nwords, it is the claim of the respondent that none of the witnesses have
\nspoken to any overt act on his part or his involvement in the alleged
\nconspiracy. Learned senior counsel for the respondent has also pointed out
\nthat out of 78 witnesses no one has made any relevant comment or statement
\nabout the alleged involvement of the respondent herein in the matter in
\nquestion.
\n17) In order to appreciate the claim and the stand of the respondent
\nherein as a panel advocate, we have perused the legal opinion rendered by
\nthe respondent herein in the form of Legal Scrutiny Report dated 10.09.2003
\nas to the title relating to Sri B.A.V.K. Mohan Rao, S\/o late Shri Someshwar
\nRao which is as under.
\n\u201cLegal Scrutiny Report
\nDated 10.09.2003.<\/p>\n
To
\nThe Branch Manager,
\nVijaya Bank,
\nNarayanaguda
\nHyderabad<\/p>\n
Sir,<\/p>\n
Sub:- Title Opinion Shri BAVK Mohan Rao
\nS\/o Late Shri Someswar Rao.<\/p>\n
With reference to your letter dated NIL. I submit my Scrutiny Report
\nas hereunder:-<\/p>\n
1. Name and address of the Mortgagor
\nShri. BAVK Mohan Rao
\nS\/o Late Shri Someswar Rao
\nR\/o 1-1 290\/3, Vidyanager, Hyderabad.<\/p>\n
2. Details\/Description of documents scrutinized:<\/p>\n
|Sl.No. |Date |Name of the documents |Whether |
\n| | | |Original\/ |
\n| | | |Certified |
\n| | | |True Copy |
\n|1. |12.05.2003 |C.C. Pahais for the year |Xerox Copy |
\n| | |1972-73 and 1978-79 | |
\n|2. |08.02.1980 |Death Certificate of Shri PV |Xerox Copy |
\n| | |Narahari Rao | |
\n|3. |07.03.1980 |Legal Heir Certificate of Shri|Xerox Copy |
\n| | |PV Narahari Rao | |
\n|4. |24.04.1980 |C.C. of Regd. GPA No. 58\/80 |Xerox Copy |
\n|5. |19.09.1980 |Regd. Sale Deed No. 1243\/80 |Xerox Copy |
\n| | |with Plan | |
\n|6. |07.12.1998 |Sanctioned Plan vide |Xerox Copy |
\n| | |proceeding No. 2155\/98 | |
\n|7. |02.01.2003 |Development Agreement |Xerox Copy |
\n|8. |25.04.2003 |EC No. 6654\/2003 for the |Xerox Copy |
\n| | |period from 28.06.1980 to | |
\n| | |31.03.1982 | |
\n|9. |25.04.2003 |EC No. 4136\/2003 for the |Xerox Copy |
\n| | |period from 01.04.1982 to | |
\n| | |23.03.1984 | |
\n|10. |21.04.2003 |EC No. 3918\/2003 for the |Xerox Copy |
\n| | |period from 24.03.1994 to | |
\n| | |20.04.2003 | |
\n|11 |28.07.2003 |Agreement for Sale |Original |<\/p>\n
3. Details\/Description of Property:-<\/p>\n
Sl.No. Sy. No.\/H.No. Extent of land Location Boundaries
\nBuilding Dist.Village<\/p>\n
All that Flat bearing No. F-5 on First Floor, admeasuring 900 sq. Ft,
\nalong with undivided share of land 28 sq yds, out of total admeasuring
\n870 sq. yds constructed on Plot Nos. 3, 4 and 5 in Sy. Nos. 84 and 85
\nin the premises of \u201cGuru Datta Nivas\u201d, situated at Nerdmet,
\nMalkajagiri Municipality, and Mandal, Ranga Reddy Dist. Hyderabad and
\nbounded by:<\/p>\n
FLAT BOUNDARIES: LAND BOUNDARIES
\nNORTH: Flat No. F-6 20-0\u201d
\nSOUTH: Open to sky Wide Road, Sy No. 86
\nEAST : Corridor & Stair Case Sy. Nos. 76 and 78 open
\nto sky.
\nWEST : Open to sky<\/p>\n
4. Brief History of the Property and How the owner\/Mortgagor has
\nderived title:<\/p>\n
The Pahains for the years 1972-73 and 1978-79 under document No. 1
\nreveals that Sri. Venkat Naraari Rao is the pattadar and possessor of
\nthe land admeasuring Ac. 1-31 guntas in Sy No. 84 and Ac. 1-22 guntas
\nin Sy No. 85 of Malkajgiri, Hyderabad.<\/p>\n
The document No. 2 shows that Sri. PV Narahari Rao was expired on
\n23.01.1980 as per the Death Certificate issued by MCH.<\/p>\n
The document No 3 shows that Smt. Saraswathi Bai is only the legal
\nheir of Late Shri PV Narahari Rao.<\/p>\n
The document No. 4 shows that Smt. Saraswathi Bai executed a GPA in
\nfavour of Sri. CV Prasad Rao, empowering him to deal and sell the
\nabove said property. The GPA was registered in the office of sub-
\nRegistrar of Hyderabad-East vide document No. 58\/80 dated 24.04.1980.<\/p>\n
The document No. 5 shows that Smt. Saraswathi Bai sold the Plot Nos.
\n3, 4 and 5 admeasuring 870 sq yds. situated at Malkajgiri, Hyderabad
\nto Smt. N. Samson Sanjeeva Rao and executed a sale deed in his favour
\nby virtue of document No. 1243\/80 dated 19.09.1980 registered in the
\noffice of sub-registrar of Uppat, Ranga Reddy.<\/p>\n
The document No. 6 shows that Shri N. Samson Sanjeeva Rao obtained
\npermission from Malkajgiri Municipality for construction of
\nResidential building consisting of Ground + 4 floors vide permit No.
\nG1\/2155\/98 dated 07.12.1998.<\/p>\n
The document No. 7 shows that Shri N. Samson Sanjeeva Rao entered into
\ndevelopment agreement with Shri PY Kondal Rao for construction of
\nresidential flats in the above said plots.<\/p>\n
The document Nos. 8, 9 and 10 are the Encumbrance Certificates for the
\nperiod from 28.06.1998 to 20.04.2003 (23 years) which disclose only
\nthe transactions mentioned in document No. 5.<\/p>\n
The document No. 11 shows that Shri N. Samson Sanjeeva Rao (owner)
\nalong with Shri PY Kondal Rao (builder) agreed to sell the Schedule
\nProperty (referred under Item No. III of this opinion) to Shri BAVK
\nMohan Rao (applicant) for a total sale consideration of Rs. 5,50,000\/-
\nand Shri. BAVK Mohan Rao (applicant) also agreed to purchase the said
\nproperty for the same consideration.<\/p>\n
5. Search and Investigation.<\/p>\n
|5.1 |The person who is the |Shri NS Sanjeeva Rao |
\n| |present owner of the |(present owner\/vendor) and |
\n| |property |Shri BAVK Mohan Rao |
\n| | |(purchaser\/Vendee) |
\n|5.2 to 5.5 |xxx |xxx |
\n|5.6 |Whether there the latest|The document No. 5 is |
\n| |title deed and |available in Xerox |
\n| |immediately previous |(original verified) |
\n| |title deed(s) are | |
\n| |available in original | |
\n|5.7 to 5.13|xxx |xxx |
\n|5.14 |Whether the proposed |Yes, Equitable mortgage is |
\n| |equitable mortgage by |possible. The original |
\n| |deosit of title deed is |registered Sale Deed |
\n| |possible? If so, what |executed in favour of Shri |
\n| |are the documents to be |BAVK Mohan Rao (applicant) |
\n| |deposited? If deposit is|by the Vendors along with |
\n| |not possible, can there |all the documents as |
\n| |be simple mortgage or a |mentioned in the list in |
\n| |registered memorandum or|Item No. 2 of this opinion |
\n| |by any other mode of |should be deposited. |
\n| |mortgage? | |
\n|5.15to 5.20|xxx |xxx |<\/p>\n
6-8 xxx xxx xxx<\/p>\n
9. CERTIFICATE<\/p>\n
I am of the opinion that Shri NS Sanjeeva Rao is having clear
\nmarketable title by virtue of Regd. Sale Deed No. 1243\/1980 dated
\n19.09.1980 referred document No. 5 of this opinion. He can convey a
\nvalid clear marketable title in favour of Shri BAVK Mohan Rao
\n(applicant) in respect of the schedule property (referred under Item
\nNo. 3 of this opinion) by duly executing a Regd. Sale Deed in his
\nfavour.<\/p>\n
Shri BAVK Mohan Rao (applicant) can create a valid equitable mortgage
\nwith the Bank by depositing the original Regd. Sale deed executed in
\nhis by the vendors and also depositing all the documents as mentioned
\nin the list in Item No. 2 of this opinion. I further certify that:-<\/p>\n
|1. |There are no prior mortgage\/charge | |
\n| |whatsoever as could be seen from the | |
\n| |encumbrance certificate for the period | |
\n| |from 28.06.1980 to 20.04.2003 pertaining to|Yes |
\n| |the immovable property covered by the above| |
\n| |title deed(s). | |
\n|2. |There are prior mortgages\/charges to the | |
\n| |extent, which are liable to be cleared or | |
\n| |satisfied by complying with the following. |NA |
\n|3. |There are claims from minors and | |
\n| |his\/her\/their interest in the property to | |
\n| |the extent of (specify) the share of |NA |
\n| |minor(s) with name | |
\n|4. |The undivided share of minor of (specify | |
\n| |the liability that is fastended or could be|NA |
\n| |fastened on the property). | |
\n|5. |The property is subject to the payment of | |
\n| |Rupees (specify the liability that is | |
\n| |fastened or could be fastened on the |NA |
\n| |property) | |
\n|6. |Provisions of Urban Land (Ceiling and | |
\n| |Regulation) Act are not applicable. |NA |
\n| |Permission obtained. | |
\n|7. |Holding\/Acquisitions in accordance with the| |
\n| |provisions of the land: |NA |
\n|8. |The mortgage if created will be perfect and| |
\n| |available to the bank for the liability of | |
\n| |the intending borrower: Shri BAVK Mohan Rao| |
\n| |(Applicant) | |<\/p>\n
The Bank is advised to obtain the encumbrance certificate for the
\nperiod from 21.04.2003 till the date after obtaining a registered sale
\ndeed in favour of Shri BAVK Mohan Rao (applicant)<\/p>\n
SEARCH REPORT:
\nI have verified the title deed of Shri N.S. Sanjeeva Rao in the office
\nof sub-Registrar of Uppal, Hyderabad on 18.07.2003 and found that the
\nsale transaction between parties, schedule property stamp papers,
\nregd. Sale Deed No. 1243\/1980 are genuine. The verification receipt
\nis enclosed herewith.<\/p>\n
(K. NARAYANA RAO)
\nADVOCATE\u201d<\/p>\n
The above particulars show that the respondent herein, as a panel advocate,
\nverified the documents supplied by the Bank and rendered his opinion. It
\nalso shows that he was furnished with Xerox copies of the documents and
\nvery few original documents as well as Xerox copies of Death Certificate,
\nLegal heir-ship Certificate, Encumbrance Certificate for his perusal and
\nopinion. It is his definite claim that he perused those documents and only
\nafter that he rendered his opinion. He also advised the bank to obtain
\nEncumbrance Certificate for the period from 21.04.2003 till date. It is
\npointed out that in the same way, he furnished Legal Scrutiny Reports in
\nrespect of other cases also.
\n18) We have already mentioned that it is an admitted case of the
\nprosecution that his name was not mentioned in the FIR. Only in the charge-
\nsheet, the respondent has been shown as Accused No. 6 stating that he
\nsubmitted false legal opinion to the Bank in respect of the housing loans
\nin the capacity of a panel advocate and did not point out actual ownership
\nof the properties in question.
\n19) Mr. Venkataramani, learned senior counsel for the respondent
\nsubmitted that in support of charge under Section 120B, there is no factual
\nfoundation and no evidence at all. Section 120A defines criminal
\nconspiracy which reads thus:
\n\u201c120A. Definition of criminal conspiracy.- When two or more persons
\nagree to do, or cause to be done,-<\/p>\n
1) an illegal act, or<\/p>\n
2) an act which is not illegal by illegal means, such an agreement is
\ndesignated a criminal conspiracy:
\nProvided that no agreement except an agreement to commit an offence
\nshall amount to a criminal conspiracy unless some act besides the
\nagreement is done by one or more parties to such agreement in
\npursuance thereof.<\/p>\n
Explanation.- It is immaterial whether the illegal act is the ultimate
\nobject of such agreement, or is merely incidental to that object.\u201d<\/p>\n
Section 120B speaks about punishment of criminal conspiracy. While
\nconsidering the definition of criminal conspiracy, it is relevant to refer
\nSections 34 and 35 of IPC which are as under:
\n\u201c34. Acts done by several persons in furtherance of common intention.-
\nWhen a criminal act is done by several persons in furtherance of the
\ncommon intention of all, each of such persons is liable for that act
\nin the same manner as if it were done by him alone.\u201d<\/p>\n
\u201c35. When such an act is criminal by reason of its being done with a
\ncriminal knowledge or intention. – Whenever an act, which is criminal
\nonly by reason of its being done with a criminal knowledge or
\nintention, is done by several persons, each of such persons who joins
\nin the act with such knowledge or intention is liable for the act in
\nthe same manner as if the act were done by him alone with that
\nknowledge or intention.\u201d<\/p>\n
20) The ingredients of the offence of criminal conspiracy are that there
\nshould be an agreement between the persons who are alleged to conspire and
\nthe said agreement should be for doing of an illegal act or for doing, by
\nillegal means, an act which by itself may not be illegal. In other words,
\nthe essence of criminal conspiracy is an agreement to do an illegal act and
\nsuch an agreement can be proved either by direct evidence or by
\ncircumstantial evidence or by both and in a matter of common experience
\nthat direct evidence to prove conspiracy is rarely available. Accordingly,
\nthe circumstances proved before and after the occurrence have to be
\nconsidered to decide about the complicity of the accused. Even if some
\nacts are proved to have committed, it must be clear that they were so
\ncommitted in pursuance of an agreement made between the accused persons who
\nwere parties to the alleged conspiracy. Inferences from such proved
\ncircumstances regarding the guilt may be drawn only when such circumstances
\nare incapable of any other reasonable explanation. In other words, an
\noffence of conspiracy cannot be deemed to have been established on mere
\nsuspicion and surmises or inference which are not supported by cogent and
\nacceptable evidence.
\n21) In the earlier part of our order, first we have noted that the
\nrespondent was not named in the FIR and then we extracted the relevant
\nportions from the charge-sheet about his alleged role. Though statements
\nof several witnesses have been enclosed along with the charge-sheet, they
\nspeak volumes about others. However, there is no specific reference to the
\nrole of the present respondent along with the main conspirators.
\n22) The High Court while quashing the criminal proceedings in respect of
\nthe respondent herein has gone into the allegations in the charge sheet and
\nthe materials placed for his scrutiny and arrived at a conclusion that the
\nsame does not disclose any criminal offence committed by him. It also
\nconcluded that there is no material to show that the respondent herein
\njoined hands with A-1 to A-3 for giving false opinion. In the absence of
\ndirect material, he cannot be implicated as one of the conspirators of the
\noffence punishable under Section 420 read with Section 109 of IPC. The
\nHigh Court has also opined that even after critically examining the entire
\nmaterial, it does not disclose any criminal offence committed by him.
\nThough as pointed out earlier, a roving enquiry is not needed, however, it
\nis the duty of the Court to find out whether any prima facie material
\navailable against the person who has charged with an offence under Section
\n420 read with Section 109 of IPC. In the banking sector in particular,
\nrendering of legal opinion for granting of loans has become an important
\ncomponent of an advocate\u2019s work. In the law of negligence, professionals
\nsuch as lawyers, doctors, architects and others are included in the
\ncategory of persons professing some special skills.
\n23) A lawyer does not tell his client that he shall win the case in all
\ncircumstances. Likewise a physician would not assure the patient of full
\nrecovery in every case. A surgeon cannot and does not guarantee that the
\nresult of surgery would invariably be beneficial, much less to the extent
\nof 100% for the person operated on. The only assurance which such a
\nprofessional can give or can be given by implication is that he is
\npossessed of the requisite skill in that branch of profession which he is
\npractising and while undertaking the performance of the task entrusted to
\nhim, he would be exercising his skill with reasonable competence. This is
\nwhat the person approaching the professional can expect. Judged by this
\nstandard, a professional may be held liable for negligence on one of the
\ntwo findings, viz., either he was not possessed of the requisite skill
\nwhich he professed to have possessed, or, he did not exercise, with
\nreasonable competence in the given case, the skill which he did possess.
\n24) In Jacob Mathew vs. State of Punjab & Anr. (2005) 6 SCC 1 this court
\nlaid down the standard to be applied for judging. To determine whether the
\nperson charged has been negligent or not, he has to be judged like an
\nordinary competent person exercising ordinary skill in that profession. It
\nis not necessary for every professional to possess the highest level of
\nexpertise in that branch which he practices.
\n25) In Pandurang Dattatraya Khandekar vs. Bar Council of Maharashtra &
\nOrs. (1984) 2 SCC 556, this Court held that \u201c\u2026there is a world of
\ndifference between the giving of improper legal advice and the giving of
\nwrong legal advice. Mere negligence unaccompanied by any moral delinquency
\non the part of a legal practitioner in the exercise of his profession does
\nnot amount to professional misconduct.
\n26) Therefore, the liability against an opining advocate arises only when
\nthe lawyer was an active participant in a plan to defraud the Bank. In the
\ngiven case, there is no evidence to prove that A-6 was abetting or aiding
\nthe original conspirators.
\n27) However, it is beyond doubt that a lawyer owes an \u201cunremitting
\nloyalty\u201d to the interests of the client and it is the lawyer\u2019s
\nresponsibility to act in a manner that would best advance the interest of
\nthe client. Merely because his opinion may not be acceptable, he cannot be
\nmulcted with the criminal prosecution, particularly, in the absence of
\ntangible evidence that he associated with other conspirators. At the most,
\nhe may be liable for gross negligence or professional misconduct if it is
\nestablished by acceptable evidence and cannot be charged for the offence
\nunder Sections 420 and 109 of IPC along with other conspirators without
\nproper and acceptable link between them. It is further made clear that if
\nthere is a link or evidence to connect him with the other conspirators for
\ncausing loss to the institution, undoubtedly, the prosecuting authorities
\nare entitled to proceed under criminal prosecution. Such tangible
\nmaterials are lacking in the case of the respondent herein.
\n28) In the light of the above discussion and after analysing all the
\nmaterials, we are satisfied that there is no prima facie case for
\nproceeding in respect of the charges alleged insofar as respondent herein
\nis concerned. We agree with the conclusion of the High Court in quashing
\nthe criminal proceedings and reject the stand taken by the CBI.
\n29) In the light of what is stated above, the appeal fails and the same
\nis dismissed.<\/p>\n
…\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J.<\/p>\n
(P. SATHASIVAM)<\/p>\n
..\u2026….\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026J.<\/p>\n
(RANJAN GOGOI)<\/p>\n
NEW DELHI;
\nSEPTEMBER 21, 2012.<\/p>\n
| |<\/p>\n
| | | |<\/p>\n
———————–
\n28<\/p>\n","protected":false},"excerpt":{"rendered":"
Merely because an Advocate’s opinion may not be acceptable, he cannot be mulcted (punished) with criminal prosecution, particularly, in the absence of tangible evidence that he associated with other conspirators.…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[47],"tags":[567],"class_list":["post-1246","post","type-post","status-publish","format-standard","hentry","category-legal-update","tag-cant-sue-lawyers-for-wrong-advice","no-post-thumbnail","clearfix","entry"],"jetpack_publicize_connections":[],"yoast_head":"\n
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