Modus Operandi Having Come to the Notice of the Higher Officers, Inspection of the Branch was Carried Out – Supreme Court Upholds Conviction of Petitioners in Bank Fraud Case

The Supreme Court of India has affirmed the conviction of T.R. Vijayaraman and B. Kanagarajan, rejecting their Special Leave Petitions against the High Court’s decision which upheld their sentences for conspiracy, fraud, and cheating related to unauthorized banking transactions. The bench of Justices C.T. Ravikumar and Rajesh Bindal supported the earlier judicial findings in a detailed judgment.

The accusations centered around Sections 120-B (conspiracy), 420 (cheating), and 477(A) of the Indian Penal Code (IPC), along with Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The case pertains to illicit activities involving unauthorized temporary Demand Overdrafts arranged by bank officials, which benefited various businessmen including the petitioners.

Originating from an FIR by the Central Bureau of Investigation (CBI) in 2004, the case details fraudulent transactions at the Indian Bank, Srirangam Branch, Trichy, where funds were irregularly credited without the backing of negotiable instruments, resulting in interest-free advances to the accused. An internal bank inspection in January 2004 unveiled these discrepancies, leading to the immediate rectification of accounts by the implicated parties, indicating acknowledgment of their misconduct.

Direct Benefits: The court observed that the fraudulent transactions were specifically tailored to benefit the petitioners, who promptly rectified their accounts following the inspection, an act that underscored their complicity.

1. Dismissal of Defenses: Arguments positing that the transactions were standard banking practices were dismissed, with the court underscoring the orchestrated manipulation of banking processes to facilitate these transactions.
2. Evidence and Conspiracy: Detailed examination by the court showed a clear pattern of collusion between bank officials and the businessmen, aimed at circumventing standard banking norms for personal gain.
3. Reference to Similar Cases: The dismissal of related SLPs involving co-accused in earlier proceedings affirmed the consistency of judicial appraisal in these matters.

Decision: The Supreme Court, finding no merit in the appeals, confirmed the lower courts’ decisions, mandating the petitioners to surrender within two weeks.

Date of Decision: May 3, 2024

T.R. Vijayaraman vs. The State of Tamil Nadu