Legal Question in Banking Law in India

Re: Introducer is not liable for fraud done by Account holder

SUPREME COURT OF INDIA

Before :- K.G. Balakrishnan and B.N. Srikrishna, JJ. Criminal Appeal No. 650 of 1998. D/d. 21.4.2004. Manoranjan Das - Appellant

Versus

State of Jharkhand - Respondent

ORDER

K.G. Balakrishnan, J. - The appellant herein was tried for offence punishable under Sections 419/420/468/471 IPC by the Judicial Magistrate, 1st Class, Jamshedpur, Singhbhu. He was found guilty by the Magistrate for the offence punishable under Section 420 IPC and was sentenced to undergo imprisonment for a period of three years. The appellant filed an appeal before the Sessions Court challenging his conviction and sentence. The appellate Court converted the conviction of the appellant from Section 420 IPC to a conviction under Section 420/109 IPC, however, the sentence was maintained and appellant filed a revision before the High Court, though his revision petition was dismissed, the sentence of imprisonment was reduced to the period of six months. Aggrieved by the same, the present appeal is filed.

There is no evidence to show that the present appellant instigated Loknath Acharya to present bogus drafts before the complaint Bank. It is also not correct to say that appellant was in anyway responsible for the loss sustained by the Bank. When the bank passed the cheque for Rs. 27,000/- at a time when the account holder Loknath Acharya had no sufficient money in his credit. They acted on the bogus drafts given by him. For which the appellant who had introduced the account holder about six months back cannot be made liable for commission of offence of abetting office of cheating.

The trial court as well as the appellate court committed serious error in finding the appellant guilty of judgment of the trial court, Sessions Court and the judgment of the High Court and acquit the appellant of the charge of Section 420/109 IPC. The bail bonds shall stand discharged. The appeal is allowed.

Appeal allowed.