No Evidence Directly Implicating Acquitted Accused: Punjab & Haryana High Court Upholds Acquittal in ₹55 Lakh Bank Fraud

Punjab & Haryana High Court, in The State (Through CBI) vs. Rakesh Kumar and Others and Surjit Singh vs. CBI, dismissed an appeal by the CBI challenging the acquittal of two accused, Rakesh Kumar and Ravi Shankar, in a ₹55.25 lakh bank fraud case. The court affirmed that there was no direct evidence linking them to the conspiracy. Simultaneously, the court upheld the conviction of Surjit Singh, confirming his role in opening fake accounts and withdrawing fraudulent funds from the bank.

The case involved allegations of a criminal conspiracy between multiple individuals, including Surjit Singh, to defraud the State Bank of India (SBI) by depositing forged demand drafts into fictitious accounts opened at Punjab National Bank (PNB), Ludhiana. The CBI accused the defendants of withdrawing large sums of money through these fake accounts.

In December 1997, the Special Judicial Magistrate, CBI, Patiala, acquitted Rakesh Kumar and Ravi Shankar, citing a lack of direct evidence against them. However, the court convicted Surjit Singh and another accused, Ram Pal (since deceased), for their roles in the conspiracy. The CBI challenged the acquittal of Rakesh Kumar and Ravi Shankar, while Surjit Singh filed a revision petition seeking to overturn his conviction.

The High Court thoroughly examined the evidence presented by the CBI against Rakesh Kumar and Ravi Shankar. The court found that although an Ambassador car was recovered in Rakesh Kumar's name and it was allegedly purchased with fraudulent funds, there was no proof that he had knowledge of the conspiracy. Justice Sureshwar Thakur, writing for the bench, observed:

"Merely on the disclosure statement of co-accused Ram Pal, no finding of conviction can be recorded against accused Rakesh Kumar." [Para 26]

Similarly, the court found no substantial evidence against Ravi Shankar, who was accused of preparing fake demand drafts. No recovery of money or drafts was made from him, and no direct involvement was proven:

"Since no recovery became effected of the blocks allegedly prepared by accused Ravi Shanker, nor any amount of fraud monies became recovered from him, the charge drawn against the accused was not well founded." [Para 28]

Conviction of Surjit Singh: Incriminating Disclosure Statements and Recoveries

The court upheld the conviction of Surjit Singh, relying heavily on his own detailed disclosure statement, which outlined how he conspired with others to defraud the bank by opening fictitious accounts and withdrawing money through forged demand drafts. The court noted that Singh's confession was corroborated by multiple recoveries, including large sums of cash, land purchases, and valuables, all traced back to the fraudulent withdrawals.

"The respectively validly drawn disclosure statements and the recovery memo(s) comprise clinching and cogent evidence for constraining this Court to conclude that the charge drawn against the accused becomes proven to hilt." [Para 25]

The court reiterated the principle that an acquittal should not be overturned unless there is clear evidence of misappreciation of facts or legal errors. The CBI’s case against Rakesh Kumar and Ravi Shankar, according to the court, lacked sufficient probative value to warrant a conviction:

"Unless there was evidence... displaying that Rakesh Kumar was in the know that his uncle Ram Pal had made fictitious withdrawals, no finding of conviction could be recorded against him." [Para 27]

The High Court dismissed the CBI’s appeal, affirming the acquittal of Rakesh Kumar and Ravi Shankar. However, it upheld the conviction of Surjit Singh and directed that his sentence be executed if he was out on bail. The court also confirmed that its findings would not impact the ongoing trial of the proclaimed offenders in the case.

"In consequence, there is no merit in the appeal... The impugned verdict of acquittal, as made qua accused Rakesh Kumar and Ravi Shankar, is maintained and affirmed." [Para 30]

"The impugned concurrent verdict(s) of conviction, and consequent thereto sentence(s)... as imposed upon convict-petitioner Surjit Singh are affirmed." [Para 31]

The High Court's decision underscores the importance of direct evidence in securing convictions in conspiracy cases. While the acquitted accused were found to have no direct involvement in the fraud, the conviction of Surjit Singh was upheld based on his own incriminating statements and the recovery of fraudulently obtained assets. The ruling also reinforces the principle that appeals against acquittals require substantial evidence of judicial error.

Date of Decision: September 18, 2024