Smt. P.Vijaya Durga

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP

APVS200000152014

IN THE COURT OF THE I ADDITIONAL SPECIAL JUDGE FOR

C.B.I. CASES, VISAKHAPATNAM

Present : Smt. P. Vijaya Durga,

I Addl. Special Judge for C.B.I., Cases, Visakhapatnam.

Friday, this the 17th day of April, 2026 Monday, this the 18th day of August, 2025

C.C.32/2014

RC.No.09(A)/2012/CBI-VSP

Between:

The State Represented by Inspector of Police, SPE, CBI, Visakhapatnam … Complainant

And

1.Shri Kalluri Satyanarayana, S/o Sri Parayya, Manager (Personal Banking Division), State Bank of India, Main Branch, Bhimavaram, East Godavari District, R/o D.No.12-7-85, Near Boolakamma Temple, Bavisettivaari Peta, Eluru – 534 001, West Godavari District.

2.Shri Chaganti Chalapathi Rao, S/o Late Basava Raju, Manager (under suspension), State Bank of India, Gollapalem, East Godavari District, R/o D.No.1-67-25, Sector-2, MVP Colony, Visakhapatnam.

3.Shri Nidadavolu Venkata Ramana Rao, S/o Shri Surya Narayana Murthy, Chief Manager, State Bank of India, Mid- Corporate Group, Regional Office, Local Head Office, Hyderabad, R/o D.No.1-1-336/39, Plot No.202, Sai Kartikeya Nilayam, Vivek Nagar, Chikkadpalle, Hyderabad – 500 020.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 2

4.Shri Manapragada Ramana Rao, S/o Shri Subba Rao, Assistant Manager (Accounts), State Bank of India, Atreyapuram, East Godavari District, R/o D.No.3-348, Rama Krishna Nagar, Rajahmundry – 533 101, East Godavari District.

5.Shri Mallidi Venkata Narayana Reddy, S/o Late Veera Raghava Reddy, Managing Director, M/s VNR Refineries Pvt. Ltd., Vemulapalli – Dwarapudi, Mandapeta Mandal, East Godavari District, R/o Flat No.402, Goti Residency, Near Krishna Temple/Zilla Parishad, Maharanipeta, Visakhapatnam.

6.M/s VNR Refineries Pvt. Ltd., R/o D.No.9-82, Main Road, Ramavaram – 533 348, East Godavari District, represented by Shri Mallidi Venkata Narayana Reddy, S/o Late Veera Raghava Reddy, DOB: 14.10.1969, R/o Flat No.402, Goti Residency, Near Krishna Temple/Zilla Parishad, Maharanipeta, Visakhapatnam.

7.Shri Poduri Subba Rao, S/o Shri P.Suryanarayana Murthy, Assistant Manager, State Bank of India, Main Branch, Rajahmundry, East Godavari District, R/o D.No.6-111, Aravindnagar, Morampudi Junction, Rajahmundry – 533 103, East Godavari District. … Accused

This case coming for final hearing before in the presence of learned Public Prosecutor for the Complainant and Sri V.S.N.Sastry, Advocate for A1, Sri B.V. Ravi Kumar and S.S.Murthy, Advocates for Accused No.2, A4 and A7 and Sri Y.V.Subba Reddy, Advocate for A3 and Sri M. Ravi Raaz, Advocate for Accused No.5 and 6 and the matter having stood over for consideration till this day, this Court delivered the following:

J U D G M E N T

1.The Inspector of Police, Central Bureau of Investigation,

Special Police Establishment, Visakhapatnam filed a charge sheet in

Cr.No.RC.09(A)/2012 of Central Bureau of Investigation, Special Police

Establishment, Visakhapatnam against the Accused 1 to A7 for the offences under Sections 120-B r/w 420, 468, 471, 477-A of I.P.C., and

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 3

Section 13 (2) r/w 13 (1) (d) of P.C.Act, 1988 and alleging in brief as follows:

2.Sri Kalluri Satyanarayana (A1) worked as Relationship Manager,

Medium Enterprises (RMME), State Bank of India, Sales Hub, Regional

Business Office, Kakinada, East Godavari District during the period between 10.10.2010 and 25.07.2012. He was responsible for acquiring and maintaining relationship with new Medium Enterprises accounts and also taking care of existing Medium enterprises accounts. He was also responsible to marketing and acquire proposals from the market on behalf of the branch, compile opinion reports, complete KYC formalities of the customer, conduct pre and post sanction inspection of the units and the properties offered as security for creating equitable mortgage, if the required limits are above Rs.1

Crore and present the same to the respective committees for sanction of limits. After sanction of the loan, he was also responsible for the documentation, scrutiny of stock statements, inspection of books of accounts and inspect the unit once in a year to ensure end use of funds and to monitor the accounts.

Shri Chaganti Chalapathi Rao (A2) worked as Branch Manager,

State Bank of India, Anaparthy during the period from 16.11.2009 to 01.10.2011. Shri Nidadavolu Venkata Ramana Rao (A3) worked as

Branch Manager, State Bank of India, Anaparthy during the period from

April 2007 and June 2009. A3 is predecessor to A2. Their duties are to attend internal administration, business development, conducting pre-sanction and post sanction inspections along with the Field officer, sanction of loans within their delegated financial powers. He also attend to forwarding the requests to the competent authority with recommendations for sanction of loans along with the processing

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 4 notes, confirm the valuations done by the Panel Valuer, attend to post sanction formalities, ensure end use of funds and ensure recovery of loans extended by the Bank. Sri Manapragada Ramana Rao (A4) worked as Assistant Manager (Advances), State Bank of India,

Anaparthy during the period from 29.01.2009 and 29.09.2011. His duties were passing of cheques, processing of loan applications, preparing appraisals and forwarding the same to the competent authority through the Branch Manager for sanction of loans, conducting pre sanction inspections, attending to documentation and processing of the requests for renewal of the existing loans and to monitor the accounts.

Shri Mallidi Venkata Narayana Reddy (A5) is Managing Director of

M/s VNR Refineries Pvt. Ltd., Vemulapalle and Managing Partner, M/s

Balagam Reddy and others, Mandapeta, East Godavari District. As

Managing Director, he represents M/s VNR Refineries Pvt. Ltd (A6), a private limited company incorporated on 16.09.2008 vide Certificate of

Incorporation No. U11100AP2008PTC061053 of 2008-2009 before the

Asst. Registrar of Companies, Hyderabad. This company was established for carrying out the business as manufacturers representatives, exporters, importers, factors, agents, dealers, distributors, suppliers and refiners and to establish, run, supervise, control, manage and maintain refineries for various oils. Sri Vatturi

Bhavan Kumar, Shri Tetali Srinivasa Reddy and Shri Mallidi Eswara

Reddy are the other Directors. Shri Poduri Subba Rao (A7) worked as

Assistant Manager (Agriculture Advances) between the period from 31.07.2009 to 17.10.2013. He was responsible for processing crop loans, DWACRA loans (SHG) and Government sponsored loans, poultry loans etc., sanctioning of fresh loans and renewal of existing

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 5 loans, attend meetings at MPDO office to recover the loans. Accused

A1 to A4 are public servants.

The investigation revealed that the Board of VNR Refineries Pvt.

Ltd., (A6), comprising of Shri M.Venkata Narayana Reddy (A5), Shri

Tetali Srinivasa Reddy, Shri Vatturi Bhavan Kumar and Shri Mallidi

Eswara Reddy passed a resolution on 03.12.2008, authorized its

Managing Director, Shri M.Venkata Narayana Reddy (A5) to approach

State Bank of India, Anaparthi Branch for sanction of Term Loan of

Rs.3.50 crores and to submit necessary documents. Again, the said

Board passed another resolution on the same day to approach State

Bank of India, Anaparthi term loan of Rs.3.50 crores and cash credit of

Rs.3 Crores. Accordingly, Sri M.Venkata Narayana Reddy (A5) approached the State Bank of India, Anaparthy on 30.12.2008 for sanction of loan of Rs.3.50 Crores as Term Loan and Rs.3 Crores as cash credit. The borrowers i.e., Mallidi Venkata Narayana Reddy (A5),

Tetali Srinivasa Reddy, Mallidi Eswara Reddy, Vatturi Bhavan Kumar and guarantors i.e., Smt.Mallidi Bullammai, Vatturi S.R.Akshay,

Smt.Mallidi Suneetha and Smt.Vatturi Rajya Lakshmi submitted sworn affidavits by disclosing their personal assets and liabilities. M.Venkata

Narayana Reddy (A5) did not report any liabilities including housing loan availed by him from State Bank of India, Anaparthy. Similarly

Smt.Mallidi Bullammai, Tetali Srinivasa Reddy, Mallidi Eswara Reddy and Vatturi Bhavan Kumar also did not report any direct or indirect liabilities. Sri Mallidi Venkata Narayana Reddy (A5) had availed housing loan from their own branch and that he was Managing Partner of M/s Balagam Reddy and others, which availed credit limits from

State Bank of India, Commercial Branch, Kakinada, Sri N.V.Ramana (A3) did insist Sri M.Venkata Narayana Reddy (A5) from furnishing

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 6 these details. As per the opinion report of Sri N.V.Ramana Rao (A3)

dated 30.12.2008, the Branch Manager, Sri Pramod Kumar, the then

Field Officer sent the proposals to the Credit Processing Cell, but not mentioning the details of liabilities of the above borrowers and guarantors.

The investigation revealed that with reference to the proposal received by the State Bank of India, Anaparthy Branch, Sri A.Vidya

Sagar, the then Credit Analyst and Sri V.Nageswara Rao, Team

Leader, CPC, NW-II, State Bank of India, Visakhapatnam prepared

Appraisal Note dated 14.02.2009 noting that Sri Mallidi Venkata

Narayana Reddy (A5) was Executive Director of M/s Sri Satya Sai

Balagam Reddy Oils Pvt. Ltd., and he along with other partners have good business experience. They also reported that the associate firms i.e., M/s Sri Satya Sai Balagam Reddy Oils Pvt. Ltd., were enjoying credit limits from Axis Bank Ltd., Rajahmundry to the tune of Rs.6.5

Crores and M/s Balagam Reddy and others were enjoying Rs.4.05

Crores from State Bank of India, Commercial Branch, Kakinada and these accounts were ‘standard’. Sri A.Vidya Sagar and Sri

V.Nageswara Rao did not find any of the promoters, directors, company, Group Concerns in RBI’s Defaulters List, willful defaulters list, ECGC Caution List and CIBIL as on 31.03.2008. They also reported in the Appraisal Note that M/s VNR Refineries Pvt. Ltd., offered primary security in the form of hypothecation of the current assets (stocks and receivables) and plant and machinery. With regard to the collateral security, they had offered land, buildings worth Rs.3.50

Crores as per valuation dated 19.12.2008 and personal guarantee of the Directors and Guarantors worth of Rs.5.93 Crores, as per the opinion complied on 30.12.2008 by the Branch.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 7

The investigation further disclosed that Sri A.Vidya Sagar, the then Credit Analyst and Sri V.Nageswara Rao, the then Team Leader,

CPC found that the total exposure of Rs.4 Crores was adequately covered in the form of collateral securities worth of Rs.3.50 Crores, they recommended sanction of Fund Based Working Capital of Rs.1.50

Crores and also Term Loan of Rs.2.50 Crores. This proposal was approved by the Network Credit Committee in its meeting held on 14.03.2009 vide Item No.2008-09-VSP-396 and the same was conveyed by Sri V.Nageswara Rao, Chief Manager (CPC) vide his letter No.CPC/VSKP/1-138, dated 14.03.2009. Sri V.Nageswara Rao also forwarded the Appraisal Note dated 14.02.009 along with this letter, which contains the terms and conditions. Sri N.V.Ramana Rao (A3), the then Branch Manager, State Bank of India, Anaparthi conveyed the sanction of CC of Rs.1.50 Crores and TL of Rs.2.50

Crores vide letter dated 20.03.2009 addressed to M/s VNR Refineries

Pvt. Ltd (A6).

The investigation further disclosed that after sanctioning of the loan, the Board of VNR Refineries Pvt. Ltd., authorized Sri M.Venkata

Narayana Reddy to execute necessary documents and Sri Tetali

Srinivasa Reddy to witness and affix common seal of the company on papers and documents relating to the Term Loan and working capital (CC) as per the unsigned Board Resolution dated 23.03.2009.

Accepting the said Board Resolution, Sri N.V.Ramana Rao (A3) and

Sri M.Ramana Rao (A4) allowed documentation. Accordingly on 26.03.2009, Sri M.Venkata Narayana Reddy, Managing Director and

Sri T.Srinivasa Reddy, Sri M.Eswara Reddy and Sri V.Bhavan Kumar,

Directors of M/s VNR Refineries Pvt Ltd., executed agreement of Loan – cum - Hypothecation (SME-2). On the same day Sri M.Ramana Rao

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 8 (A4) prepared Memorandum for recording creation of Mortgage by deposit of title deeds (SME-5) for having received the title deeds from the guarantors in respect of the following properties.

Sl. DescriptionExtentTitle HolderLocation No.

1.Residential 338 Sq. Sri Mallidi RS No.264/3, D.No.1- BuildingYardsVenkata 112, Ramavaram. Narayana Reddy

2.House SiteAc.1.53 Sri Mallidi Veera RS No.175/2, centsRaghava ReddyRamavaram village.

3.Agricultural Land Ac.6.09 Smt.Mallidi RS No.67 & 50/2, centsBullammaiPekeru

4.Agricultural Land Ac.3.11½ Smt.Mallidi RS No.35 & 34/2, cts.SuneethaMukkinada

5.Residential 436 Sq. Sri T.Srinivasa RS No.672/7A/1A, BuildingYardsReddyAnaparthi 6Residential Plot300 Sq. Smt.Vatturi Rajya RS No.104, 106, 107, YardsLakshmi108, 181 to 183, 184 (P) & 185 (P), Nizampet,

7.Residential 240 Sq. Vatturi RS No.376, 277, 281 & BuildingYardsS.R.Akshay282, Apuroopa Township, Jeedimetla.

The details of the properties also recorded in the equitable

Mortgage Registers by M.Ramana Rao (A4), the then Assistant

Manager and Sri N.V.Ramana Rao (A3), the then Branch Manager,

State Bank of India, Anaparthi on 26.03.2009 vide EM Nos.34/23 to 34/30.

Sri Mallidi Venkata Narayana Reddy (A5) and Sri V.Bhavan

Kumar on behalf of the firm in respect of the Factory Site Ac.5.15 cents in RS.No.52 of Vemulapalli and Smt.Mallidi Bullammai in respect of

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 9

Ac.6.09 cents of item No.3 and Smt. Mallidi Suneetha in respect of

Ac.3.11 ½ cents of item No.4, Sri Tetali Srinivasa Reddy in respect of a plot measuring 436 Sq. yards along with a house in respect of Item

No.5 and Smt.V.Rajya Lakshmi in respect of a vacant site ad- measuring 300 Sq. Yards of item No.6, sent letters of confirmation for creation of mortgage by deposit of title deeds (SME-6), by post to State

Bank of India, Anaparthi Branch on 30.03.2009. The said confirmation letters were not obtained in respect of Item No.1 and Item No.7 from

Sri Venkata Narayana Reddy (A5) and Sri VSR Akshay respectively.

Sri M.Ramana Rao (A4) reported that he received documents from Sri

Mallidi Veera Raghava Reddy in respect of property in RS.No.175/2 of

Ramavaram for creating the equitable mortgage, vide confirmation letter (SME-6) which is not available with the bank in respect of the said property. Similarly, the Memorandum for recording of creation of mortgage (SME-5) by deposit of title deeds are not available in respect of Factory Site.

The investigation further reveals that though the residential house in a plot ad-measuring 338 Sq. Yards in RS.No.264/3 which is

Item No.1 of Ramavaram acquired by Sri Venkata Narayana Reddy (A5) through Conveyance Deed No. 676/2007 of SRO, Anaparthi, which was already mortgaged against the housing loan of Rs.20 lakhs from State Bank of India, Anaparthi Branch, availed by him vide

Account No.30386027350. The property was extended as collateral for the limits sanction to M/s VNR Refineries Pvt. Ltd., Sri Nidadavolu

Venkata Ramana Rao (A3) and Sri M.Ramana Rao (A4) failed to create SME-7 i.e., Memorandum for recording extension of equitable mortgage and SME-8 i.e., Letter of confirmation for extension of mortgage. Sri M.Ramana Rao (A4) did not make endorsement in the

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 10 equitable mortgage register. Both Sri M.Ramana Rao (A4), the then

Assistant Manager and Sri N.V.Ramana Rao (A3), the then Chief

Manager have made an endorsement in the cash credit register on 26.03.2009 to the effect that they obtained SME-I i.e., Letter of

Agreement (SME-1) and Guarantee Agreement (SME-3), CIBIL consent from borrowers and guarantors and the same are not available in the Bank. Smt.Mallidi Bullammai did not visit the Bank for affixing her signatures on any of the document.

The investigation further reveals that the legal opinions in respect of the properties mortgaged on 26.03.2009 were obtained by the State Bank of India, Anaparthi Branch from the Panel Advocate Sri

V.V.R.Subramanyam, Anaparthi on different dates which are as follows:

Sl.No. Details of PropertyMortgagor’s Date of LegalRemarks of name opinionthe Advocate regarding title

1.House site Ac.1.53 Sri Mallidi 25.02.2009Having clear cents RS.No.175/2, Veera Raghavatitle Ramavaram village.Reddy

2.Agricultural Land Smt.Mallidi 12.01.2009Having clear Ac.6.09 cents RS.No.67Bullammaititle & 50/2, Pekeru.

3.Agricultural Land Smt.Mallidi 12.01.2009Having clear Ac.3.11 ½ cents Bullammaititle RS.No.35 & 34/2, Mukkinada

4.Residential Building Sri T.Srinivasa 05.02.2009Having clear 436 Sq. Yards, Reddytitle RS.No.672/& A/1A, Anaparthi.

5.Residential Plot 300 Sq.Smt.Vetturi 03.02.2009Having clear Yards, RS No.104,106, Rajyalakshmititle 107, 108, 181 to 183,

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 11 184 (P) & 185 (P), Nizampet village

6.Residential Building Vatturi 03.02.2009Having clear 240 Sq.Yards, RS S.R.Akshaytitle No.376, 277, 281 & 282, Apuroopa Township, Jeedimetla.

7.Factory Site Ac.5-55 ¼ M/s VNR 09.03.2009Having clear cents RS No.52, Refineries Pvt. title Vemulapalli.Ltd.

The investigation further reveals that Sri K.V.Muralimohan,

Rajahmundry, Panel Valuer gave Valuation Reports in respect of the above properties as mentioned below and the same were certified by

Sri Ch.Chalapathi Rao (A2) and Sri M.Ramana Rao (A4) at a later date, without conducting inspection.

Sl.Details of property Mortgagor’Report ValueCertified by No.s namedate

1.House Site Sri Mallidi 20.12.2008 Rs.76.50Certified by Sri Ac.1.53 cents RS Veera lakhsCh.Chalapathi No.175/2, Raghava Rao on Ramavaram Reddy26.10.2010 at villageRs.76,00,000/- 2Agricultural Land Smt.Mallidi 20.12.2008 Rs.42.63Certified by Sri Ac.6.09 cents RS BullammailakhsCh.Chalapathi No.67 & 50/2, Rao on Pekeru26.10.2010 at Rs.42,00,000/-

3.Agricultural Land Smt.Mallidi 20.12.2008 Rs.25.96Certified by Sri Ac.3.11 ½ cents SuneethalakhsCh.Chalapathi RS No.35 & 34/2, Rao on Makkinada26.10.2010 at Rs.25,00,000/-

4.Residential Sri 20.12.2008 Rs.35.96Certified by Sri Building 436 Sq. T.SrinivasalakhsCh.Chalapathi yards ReddyRao on

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 12

RS.No.672/7A/1A,26.10.2010 at AnaparthiRs.35,00,000/-, Sri M.Ramana Rao, Field Officer also signed on the same date 5Factory Site Ac.5-M/s VNR 04.02.2009 Rs.42.74Certified by Sri 55 ¼ cents RS Refineries lakhsCh.Chalapathi No.52, Pvt. Ltd.Rao on Vemulapalli.26.10.2010 at Rs.40 lakhs, Sri M.Ramana Rao, Field Officer appears to have signed at later date with back date ‘08.02.2009’.

The investigation further reveals that the Sl.No. of the property was purchased by father of Sri Venkata Narayana Reddy (A5) vide

Document No.126/2003, dated 30.01.2003 from Nallamilli Rama

Reddy. The Encumbrance Certificate, dated 06.06.2013 reveals that the father of A5 sold or gifted the said property in parts i.e.,

(a) Ac.0.50 cents to Sri Medapati Ramalinga Reddy vide

Document No.1166 of 2003 on 11.08.2003.

(b) The remaining Ac.0.095 cents each to Sri Padala Vanama

Reddy and Sri Padala Venkatarama Reddy vide Document No.65/2004 and 66/2004 on 24.01.2004.

(c)House No.1-37/1A - plot ad-measuring 444 Sq. yards sold to Sri Goluguri Veera Rraghava Reddy vide Document No.618 and 619 of 2004 on 06.05.2004.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 13

(d)House No.1-37/A - as two flats ad-measuring 302.22 Sq

Yards each sold to Sri Nallamilli Venkata Reddy on 13.02.2008 vide

Document No.201 and 202 of 2008.

(e)Ac.0.253 cents gifted to Smt.Mallidi Bullammai, vide Document

No.1092 of 2004 on 21.07.2004.

(f) Smt.Mallidi Bullammai sold the piece of land on 13.02.2008 as house No.1-387/A – plot ad-mesasuring 568.61 Sq. Yards to Sri

Kovvuri Veera Venkata Satyanarayana Reddy, vide Document

No.196/2008.

(g)She sold plot house No.1-37/A ad-measuring 277.29 Sq. yards to Smt.Nallamilli Sujatha vide Document No.197/2008.

(h)A house No.137/A – plot ad-measuring 277.29 Sq. Yards sold to

Smt. Satti Satti Reddy vide Document No.198/2008.

Subsequently, M/s Sri Tirupathi Venkateswara Traders of

Peeraye Ramachandrapuram, Sri Nallamilli Venkata Reddy, Sri Padala

Veera Raghava Reddy, Sri Nallamilli Srinivasa Reddy, Smt.Kovvuri

Papai, Sri Kovvuri Sathi Reddy, Sri Kovvuri Rama Reddy, Sri Nallamilli

Bhaskara Reddy, Sri Kovvuri Veera Venkata Satyanarayana Reddy,

Smt.Nallamilli Suneetha and Sri Kovvuri Venkata Krishna Reddy mortgaged the land purchased by them in the above S.No.175/2 to

Andhra Bank, Anaparthi vide Document No.06.01.2012 registered as

Document No.53/2012 as per the above EC.No.711. As per this

Encumbrance Certificate, the father of A5 sold Ac.1.53 cents to various people between August 2003 to February 2008 and he was not having any title in respect of the said property to create mortgage by submitting Document No.126/2003 of SRO, Anaparthi before State

Bank of India, Anaparthi Branch. However, the Panel Advocate Sri

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 14

V.V.R.Subramanyam gave clear title as per his report, dated 25.02.2009.

The Encumbrance Certificate No.4, dated 03.01.2009 issued by the SRO, Anaparthi, which was part of legal opinion of the above Panel

Advocate V.V.R.Subramanyam in respect of the land in an extent of

Ac.1.53 cents in S.No.175/2 of Ramavaram village for the period from 10.05.1995 to 02.01.2009 does not give clear picture as it did not contain entries pertaining to the sale or gift by father of A5 between 2004 to 2008.

The certificate enclosed to the legal opinion dated 25.02.2009 of

Panel Advocate Sri V.V.R.Subramanyam issued by the Village

Revenue Officer, Ramavaram certifying that the above said property was possessed by Sri M.Veera Raghava Reddy and it was a dry land and therefore, there is no tax, was found to be false and fictitious. Sri

Ogireddy Srinivasa Rao, who is presently incharge VRO, Anaparthi reported that someone has forged his signature. Sri M. Ramana Rao (A4), the then Assistant Manager and Sri N.V. Ramana Rao (A3), the then Branch Manager deliberately did not conduct inspection of the said property and assess its value on the valuation report dated 20.12.2008 given by Sri K.V.Murali Mohan, Panel Valuer, in order to accommodate the borrower M/s VNR Refineries Pvt. Ltd., (A6) represented bySri M.Venkata Narayana Reddy (A5). In the absence of SME-1 i.e., letter of arrangement and letter of confirming the deposit of title deeds, which are supposed to contain Sri Mallidi Veera Raghava

Reddy as a guarantor, it could not be ascertained whether Sri Mallidi

Veera Raghava Reddy created equitable mortgage with State Bank of

India, Anaparthi for the limits sanctioned to M/s VNR Refineries Pvt.

Ltd., out of his own volition. The said Mallidi Veera Raghava Reddy is

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 15 not having title over the property in RS.No.175/2 as on the date of creation of mortgage with State Bank of India, Anaparthi against the limits sanctioned to M/s VNR Refineries Pvt. Ltd., State Bank of India,

Anaparthi has cannot enforce the mortgage. The said issue could not be investigated further as Mallidi Veera Raghava Reddy expired on 29.09.2009.

In respect of the property covered in Sl.No.2, the father of A5 acquired this property vide Document No.2559/1995 of SRO,

Draksharama and he mortgaged this property with State Bank of India,

Commercial Branch, Kakinada on 27.03.1997 and continue to extend the same till 02.01.2009 for the credit limits of Rs.350 lakhs sanctioned to M/s Balagam Reddy and others which is still outstanding. He also executed a gift deed vide Document No.713/2007 of SRO,

Draksharama, dated 23.03.2007 in favour of his wife Mallidi Bullammai.

The said gift deed was confirmed by said Mallidi Bullammai. She also identified her husband’s signatures on the letters addressed to State

Bank of India, Commercial Branch, Kakinada through which mortgage was extended by Sri Veera Raghava Reddy from time to time. As per the record, the said property was mortgaged to State Bank of India,

Anaparthi for the limits sanctioned to M/s VNR Refineries Pvt. Ltd., (A6) in the name of Smt.Mallidi Bullammai who is the wife of Mallidi

Veera Raghava Reddy and she confirmed to have signed SME-8 i.e.,

Letter confirming deposit of title deeds on 30.03.2009 for the above property vide Document No.713/2007, but she denied her knowledge about the creation of mortgage by her husband Sri Mallidi Veera

Raghava Reddy to State Bank of India, Commercial Branch, Kakinada.

She also denied her knowledge about the creation of mortgage in respect of the above property with State Bank of India, Anaparthi on

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 16 the basis of gift deed executed in her favour. She stated that as per the directions of her husband, she signed on several papers. The above property of Ac.6.09 cents in S.No.67 and 50/2, Pekeru Village which was mortgaged by Sri Mallidi Veera Raghava Reddy on 16.10.1995 vide Document No.2559/1995 of SRO, Draksharama with

State Bank of India, Commercial Branch, Kakinada for the limits sanctioned to M/s Balagam Reddy and others and subsequently, gifted to Mallidi Bullammai vide Document No.713/2007 will not be free unless and until the mortgage in favour of State Bank of India,

Commercial Branch, Kakinada was discharged. So, State Bank of

India, Anaparthi has no rights over this property. Even for the property ad-measuring 338 Sq. Yards at D.No.1-112 of Ramavaram obtained by

Sri M.Venkata Narayana Reddy (A5) through gift deed from his mother

Smt.Mallidi Bullammai is not available for State Bank of India,

Anaparthi Branch as the same was mortgaged by Smt.Mallidi

Bullammai with State Bank of India, Commercial Branch, Kakinada for the limits sanctioned to M/s Balagam Reddy and others in the year 1997 and the said property will not be free unless and until the mortgage in favour of the State Bank of India, Commercial Branch,

Kakinada was discharged. Sri M.Venkata Narayana Reddy (A5) intentionally arranged these properties as collateral security for the limits sanctioned by State Bank of India, Anaparthi in the name of M/s

VNR Refineries Pvt. Ltd., only with a view to deceive the Bank and secure limits. Sri N.V.Ramana Rao (A3) and Sri M.Ramana Rao (A4) did not insist for original link documents of these properties at the time of accepting for equitable mortgage.

The investigation further reveals that the following properties were valued by M/s K.Dhanapati Rao & Associates, Hyderabad. Sri

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 17

N.V.Ramana Rao (A3) and Sri M.Ramana Rao (A4) did not inspect the above properties and not assess the value of property.

Sl.No. Details of propertyMortgagor’s Report date Value name

1.Residential Plot 300 Sq.Smt. Vetturi 04.02.2009Rs.39 lakhs yards RS No.104, 106, Rayalakshmi 107, 108, 181 to 183, 184 (P) & 185 (P), Nizampet Village

2.Residential Building 240Shri Vatturi 19.12.2008Rs.40 lakhs Sq. yards, RS No.376, S.R.Akshay 277, 281 & 282, Apuroopa Township, Jeedimetla

Investigation further reveals that Sri M.Venkata Narayana Reddy (A5) requested the bank officials for enhancement of working capital limit (cash credit) from Rs.1.5 Crores to Rs.3 Crores as the sanctioned limit was not sufficient to maintain the minimum stock by addressing a letter, dated 28.08.2009. The said letter was forwarded by Sri

M.Ramesh Babu, the then Branch Manager, State Bank of India,

Anaparthi Branch to the Chief Manager, CPC, Visakhapatnam, vide his letter dated 24.09.2009. Adverting to this request, Tumuluri Viswa

Mohan, the then Chief Manager and Team Leader, CPC,

Visakhapatnam, wrote a letter dated 06.11.2009 to the Branch

Manager, State Bank of India, Anaparthi asking them to ascertain the reasons for seeking additional working capital funds, even before commencement of commercial production and also furnish a certificate from the Panel Valuer about completion of the Project. He also requested the Branch to reexamine and resubmit the proposal with clarifications. Sri M.Venkata Narayana Reddy (A5) claimed that as the

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 18

Bank did not sanction the limits as applied for in the beginning, they had to invest Rs.100 lakhs from their own sources and they started commercial production during November 2009 and were in urgent need of funds for working capital requirements. He also explained that there was a sharp increase in cost of the working capital components and they applied for enhancement of working capital limits before starting commercial production, to avoid any discontinuance in production process. Subsequently, Sri K.V.K.K.S.Sarma, the then Credit Analyst and Sri T.V.Mohan, Team Leader, CPC, Visakhapatnam prepared an appraisal note on 19.02.2010 mentioning that the associate firms of

M/s VNR Refineries Pvt. Ltd., i.e. M/s Sri Satya Sai Balagam Reddy

Oils Pvt. Ltd., were enjoying credit limits from Axis Bank Ltd.,

Rajahmundry to the tune of Rs.6.5 Crores as on 28.01.2010 and M/s

Balagam Reddy and Others were enjoying Rs.4.18 Crores from State

Bank of India, Commercial Branch, Kakinada as on 30.01.2010 and all these accounts were ‘standard’. They further reported that the company had offered hypothecation of all chargeable current assets of the company and first charge on the fixed assets acquired to be with bank finance. The net worth of the guarantors was assessed by the

Branch at Rs.2.35 Crores as on 30.12.2008. They also noted that none of the Promoters, Directors, Company, Group Concerns were figuring in RBI’s Defaulters List as on 31.03.2009, willful defaulters list as on 31.06.2009, ECGC Caution List and CIBIL as on 03.01.2010. Justifying their proposal in the appraisal note, they recommended sanction of

Standby Line of Credit of Rs.20 lakhs, Term Loan – II of Rs.80 Lakhs with a tenor of 8 years 3 months and LC of Rs.200 lakhs to M/s VNR

Refineries Pvt. Ltd. Based on the recommendations in the appraisal note, the Network Credit Committee, NW-II, Visakhapatnam, in its

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 19 meeting dated 19.02.2010 approved the above proposal vide Agenda item No.2009-10/52-VSP-1507 in some conditions.

(i)Ensuring infusion of capital of Rs.200 lakhs before disbursement and obtaining Auditors certificate.

(ii)Reimbursement strictly on satisfactory evidence of expenditure incurred and Auditors Certificate.

As per 2nd Annual Report 2009-2010 as on 31.03.2010, the paid up Capital was Rs.1 lakh and the same was increased to Rs.2 Crores indicating the Paid up Capital was increased. There is no certificate to this effect from the company or a Chartered Accountant. With regard to utilization of Term Loan, Sri M.Venkata Narayana Reddy (A5) furnished a certificate incorporating the details of supplier, amount paid, mode and date of payment for each particular machinery for a total amount of Rs.1,95,80,491/-. His completion report dated 26.11.2009, Sri K.V.Murali Mohan, Panel Engineer, Rajahmundry, estimated the cost of construction of refinery (civil works) at

Rs.73,64,000/- and enclosed a few photographs of the construction.

With regard to the machinery, Sri K.S.Chiranjeevi, Surveyor,

Rajahmundry reported that he conducted inspection of M/s VNR

Refineries Pvt Ltd., Vemulapalli on 29.10.2010 and reported that the unit was commissioned in August 2009 with an installed capacity of 100 Meter per day for refining vegetable oils from crude oils. He estimated the cost of machinery at Rs.6,67,22,131/- by enclosing the photographs of the machinery. No bills were obtained by Sri

M.Ramana Rao (A4) and Sri N.V.Ramana Rao (A3) with regard to purchase of plant and machinery.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 20

In pursuance of the said sanction dated 19.02.2010, Sri

M.Ramana Rao (A4) issued letter of arrangement, dated 25.02.2010 (SME-1) and obtained signatures of the borrowers Sri M.Venkata

Narayana Reddy, Sri V.Bhavan Kumar, Sri T.S.Reddy and Sri M.Eswar

Reddy and Guarantors Smt.Mallidi Bullemmai, Smt.M.Sunitha, Sri

Akshay, Smt.V.Rajya Lakshmi and Sri Mallidi Veera Raghava Reddy, but he did not obtain the photos of the borrowers and guarantors on the application form. The borrowers and guarantors signed in SME-3 i.e.,

Guarantee Agreement dated 25.02.2010 and SME-4 i.e., Supplemental

Agreement of Loan-cum-Hypothecation, dated 25.02.2010. Sri

M.Ramana Rao (A4) prepared Memorandum for Recording Extension of Mortgage (SME-7) by deposit of title deeds for enhanced new limits in respect of the properties which were already mortgaged. Sri

M.Ramana Rao (A4) and Sri P.Subba Rao (A7), the then Assistant

Manager (Advances) falsely certifying as if the mortgagors attended the Bank and deposited the title deeds and the mortgagors are in actual possession of the properties and they had marketable title free from all encumbrances. Sri M.Venkata Narayana Reddy (A5) sent letter of confirmation dated 23.02.2010 for extension of mortgage by deposit of title deeds covering enhanced limits by post in respect of factory site. Smt.Vatturi Rajyalakshmi, Sri V.Bhavan Kumar, Sri

V.Akshay, Sri M.Veera Raghava Reddy, Smt.Bullammai, Sri M.Eswar

Reddy, Smt.M.Sunitha, Sri T.Srinivasa Reddy submitted a letter of confirmation for extension of mortgage by deposit of title deeds covering enhanced limits dated 26.02.2010 and 20.10.2010. Sri

M.Ramana Rao (A4) and Sri Ch.Chalapathi Rao (A2) made entries for extension of the equitable mortgage vide EM Nos.38/1 to 38/8.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 21

The investigation further revealed that the signatures of Sri

Mallidi Veera Raghava Reddy and Smt.Mallidi Bullemmai on the forms revealed that none of their signatures are genuine as Sri Mallidi Veera

Raghava Reddy expired on 29.09.2009 and Smt.Mallidi Bullemmai denied her signatures on forms. Sri M.Ramana Rao (A4) and Sri

Ch.Chalapathi Rao (A2) connived with Sri M.Venkata Narayana Reddy (A5) in not only facilitating in submission of forged documents as genuine, but also falsified the Bank records with an intention to allow disbursal of limits to M/s VNR Refineries Pvt. Ltd., overlooking the interests of the Bank.

The investigation further revealed that Sri M.Ramana Rao (A4) inspected the unit on 28.09.2010 and found the stock position satisfactory covering the outstanding and enclosed a certificate issued on 28.09.2010 by Sri M.Venkata Narayana Reddy (A5) certifying that they had utilized the funds only for the purpose for which they were sanctioned. Sri M.Venkata Narayana Reddy (A5), the Managing

Director of M/s VNR Refineries Pvt. Ltd., (A6) addressed a letter, dated 26.10.2010 to the Branch Manager, State Bank of India, Anaparthi requested for enhancement of Cash Credit Limit from Rs.1.50 Crores to Rs.4.50 Crores to meet working capital requirements on account of increase in turnover. Subsequently on 03.12.2010, Sri M.Venkata

Narayana Reddy (A5) wrote another letter to the Branch Manager,

State Bank of India, Anaparthi informing that they had proposed to enhance the authorised paid up capital from Rs.2 Crores to Rs.5

Crores during the financial year 2010-2011 and infuse Rs.1.70 Crores as capital/unsecured loan. On request, Sri M.Ramana Rao (A4) and Sri

Ch.Chalapathi Rao (A2) submitted pre-sanction inspection report without mentioning the date and remarked that stocks are available to

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 22 cover the outstanding and working of the unit was satisfactory. In the said report, they mentioned that inspection was conducted by them in pursuance of the request of the unit for increasing working capital from

Rs.1.50 crores to Rs.4 crores and also mentioned that the collateral securities offered by them are satisfactory.

The investigation further revealed that the total limits were exceeding Rs.7.5 crores, the request of the unit was processed by Sri

K.Satyanarayana (A1), the then Relationship Manager (ME) and Sri

S.A.Atchyutha Ramayya, the then Credit Support Officer, ME Sales

Hub, RBO, Kakinada and they sent a proposal to the Circle Credit

Committee, Local Head Office, State Bank of India, Hyderabad vide appraisal note dated 14.12.2010 recommending renewal of working capital with enhancement from Rs.1.50 Crores to Rs.4.50 crores and renewal of other limits and also for confirmation of Branch action in continuation of the limits beyond the validity period of previous sanction i.e. 14.03.2010. The proposal was approved by the Circle Credit

Committee – II, Hyderabad in its meeting dated 21.12.2010. While giving approval, the committee directed the Branch that the enhanced portion of working capital should be made available only on infusion of

additional capital of Rs.3 Crores as envisaged, creation of additional

collateral security of Rs.0.50 crores or step up the margin to that extent and also explore the possibility of fixing the repayment period for Term

Loans to 4 years. In continuation of this approval letter dated 24.01.2011, Sri K.Satyanarayana (A1), the then Relationship Manager requested the Branch to submit compliance to the conditions of the above mentioned sanction and also ensure registration of charge with

ROC for enhanced liability to the tune of Rs.9.79 crores. In response to the letter dated 02.02.2011, Sri Ch.Chalapathi Rao (A2) reported

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 23 that Auditors Certificate for conversion of share application of Rs.3 crores as paid up capital and infusion of Rs.1.70 crore as share application money was obtained, unit had applied for registration with

ROC for Rs.9.79 crores, additional collateral security was obtained on 24.12.2010, all the existing EMIs have been duly extended to cover the enhanced limits, the unit had promised to pay December installments within a week, opinion report on the new guarantor’s assets and liabilities was obtained, CIRSIL rating was obtained and a letter would be obtained regarding Term Loan installments in 4 years.

The investigation further revealed that as per certificate dated 24.12.2010, Sri V.V.Satyanarayana, Chartered Accountant certified that the Directors of M/s VNR Refineries Pvt. Ltd., invested Rs.1.19

Crores, Sri Mallidi Eswara Reddy and Sri Tetali Srinivasa Reddy and

Sri Vatturi Bhavan Kumar invested Rs.27 lakhs each. Sri

V.V.Satyanarayana, Chartered Accountant also certified on 21.12.2010 that the existing share application money of Rs.3 lakhs was converted as paid up capital, vide letter dated 21.12.2010 addressed to the

Branch Manager, State Bank of India, Anaparthi, Sri

V.V.Satyanarayana, Chartered Accountant reported that the Board of

Directors of the company decided to infuse Rs.1.70 Crores as working capital before 31.03.2011. Sri V.V.Satyanarayana, Chartered

Accountant stated that the certificates given by him on the basis of books of accounts presented to him by the representatives of M/s VNR

Refineries Pvt. Ltd. The officials of CRISIL inspected the site on 09.06.2010 and performance of the account was reported ‘good’.

The investigation further reveals that as per Form No.5 received from ROC that M/s VNR Refineries Pvt. Ltd., reported enhancement of authorized capital from Rs.2 Crores to Rs.5 crores by enclosing

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 24 resolution, revised MOA and articles on 22.12.2010. As per Form – 8,

M/s VNR Refineries Pvt. Ltd., created a charge for Rs.10 crores on 24.12.2010. As per Form No.20B, dated 29.09.2011, the paid up capital was increased to Rs.5 crores. As per the Annual Return filed on 29.09.2011 along with Form No.20B, Sri Mallidi Venkata Narayana

Reddy (A5) is the Managing Director and Sri Tetali Srinivasa Reddy and Sri Mallidi Eswara Reddy are the Directors and there is no mention about Sri Vatturi Bhavan Kumar in the said form.

The investigation further reveals that as on 31.03.2011, paid up capital was Rs.5 Crores in M/s VNR Refineries Pvt. Ltd., break up of which is Sri M.V.Narayana Reddy Rs.1,72,00,000/-, Sri Tetali Srinivasa

Reddy Rs.63,50,000/-, Sri Mallidi Eswara Reddy Rs.63,50,000/-, Sri

Vatturi Bhavan Kumar Rs.6,00,000/- Sri Mallidi Sesharatnam

Rs.45,00,000/-, Sri Tetali Venkata Reddy Rs.45,00,000/-, Sri Mallidi

Bulli Venkata Reddy Rs.35,00,000/-, Smt.Mallidi Lakshmi

Rs.25,00,000/- and Smt.Tetali Tejovathi Rs.45,00,000/-. Sri Mallidi

Eswara Reddy and his father Sri Mallidi Bulli Venkata Reddy claimed that neither in their individual capacity or in the name of their family members i.e., Smt.Mallidi Sunitha and Smt.Mallidi Lakshmi, W/o Sri

Mallidi Bulli Venkata Reddy invested any amount in M/s VNR

Refineries Pvt. Ltd., except for offering Ac.3.11 ½ cents in RS No.35 at

Peera Ramachandrapuram possessed by Smt.Mallidi Sunitha as collateral security. Sri Tetali Srinivasa Reddy, one of the Directors in

M/s VNR Refineries Pvt. Ltd., who is brother in law of Sri M.Venkata

Narayana Reddy (A5), admitted to have invested only Rs.40 lakhs, including his wife Smt.Tetali Tejovathi and his father Sri Tetali Venkata

Reddy (A5) not only mislead the Chartered Accountant and statutory body viz., Registrar of Companies and officials of State Bank of India,

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 25

Anaparthi by giving false declaration about the infusion of funds and enhancement of paid up capital from Rs.3 Crores to Rs.5 Crores.

The investigation further reveals that with reference to the sanction dated 21.12.2010, even before the receipt of formal communication from the competent authority through RBO, Kakinada (which was actually received on 17.01.2011), Sri Ch.Chalapathi Rao (A2) issued Letter of Arrangement on 24.12.2010 and obtained signatures of the borrowers and guarantors. The borrowers and guarantors signed on guarantee agreement and Supplemental

Agreement of Loan cum Hypothecation on 24.12.2010. Additional guarantor Sri Karri Chandra Sekhar Reddy signed in the above two documents. Sri M.Ramana Rao (A4) and Sri Ch.Chalapathi Rao (A2) prepared opinion report i.e., SSI No.4 in respect of the said Sri Karri

Chandra Sekhar Reddy wherein the details of assets held by him in respect of Agricultural land of Ac.7.20 cents and Residential house to an extent of 250 Sq. Yards at Anaparthi, cash of Rs.1.75 lakhs and 70 grams of gold. Actually this form was purportedly signed by the guarantor Sri Karri Chandra Sekhar Reddy and his photograph. The address of Sri Karri Chandra Sekhar Reddy was not mentioned in the said form and even the details of the residential house claimed to have been owned by him were not mentioned. Thus, Sri M.Ramana Rao (A4) and Sri Ch.Chalapathi Rao (A2) without complying with KYC norms in respect of Sri Karri Chandra Sekhar Reddy assessed net worth without ascertaining basic details and without any documentary proof for the residential house reportedly possessed by Sri Karri

Chandra Sekhar Reddy at Anaparthi. Sri M.Ramana Rao (A4) prepared memorandum of Recording Creation of Mortgage by deposit of title deeds on 24.12.2010 in respect of Ac.7.20 cents in RS No.173

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 26 of Anaparthi village of Sri Karri Chandra Sekhar Reddy, who is guarantor and he along with Sri P.Subba Rao (A7) falsely certified confirming that Sri Karri Chandra Sekhar Reddy appeared at the Bank and confirmed possession of title for the said land. Sri M.Ramana Rao (A4) also prepared and signed Memorandum for recording extension of

Mortgage by deposit of title deeds covering enhanced limits on 24.12.2010 mentioning the names of Sri Mallidi Veera Raghava

Reddy, Smt.Mallidi Sunitha, Sri Tetali Srinivasa Reddy, Smt.Mallidi

Bullemmai, Sri VSR Akshay, Sri Vatturi Rajya Lakshmi, Sri Mallidi

Venkata Narayana Reddy and Sri P.Subba Rao (A7) and they signed on the form falsely confirming the appearance of the above borrowers and guarantors at the bank and confirmed extension of existing mortgage. SME-7 Memorandum for Recording Extension of Mortgage by deposit of title is not available in the branch in respect of Factory land and letters of confirmation for depositing title deeds. SME-8 in respect of any of the properties for which extension of the mortgage was done also not available in the branch. So, Sri M.Ramana Rao (A4) and Sri Ch.Chalapathi Rao (A2) falsely certified in the cash credit register on 24.12.2010 that they explained the details to the borrowers and guarantors. Sri M.Ramana Rao (A4) and Sri Ch.Chalapathi Rao (A2) extended the mortgage on 24.12.2010 by making entries in EM

Register vide EM Nos.39/55 to 39/62. In respect of the property offered by Sri Karri Chandra Sekhar Reddy for an extent of Ac.7.20 cents in

RS No.173 of Anaparthi, an entry was made in EM Register on 24.12.2010 by Sri M.Ramana Rao (A4), the then Assistant Manager and Sri Ch.Chalapathi Rao (A2), the then Branch Manager as EM

No.39/65.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 27

With reference to the additional property offered as collateral security by Sri Karri Chandra Sekhar Reddy, the Legal Opinion dated 23.12.2010 was given by Sri Vemuri V.R.Subrahmanyam, Panel

Advocate, certifying that he had perused the original settlement deed

dated 20.10.1949 vide Doc.No.124/1950 of SRO, Biccavole, copy of

pattadar passbook and title deed passbook and Land Revenue Tax

Receipt, dated 14.07.2009 and Encumbrance Certificate dated 22.12.2010 in respect of the above property possessed by Sri Karri

Chandra Sekhar Reddy. Except the original settlement deed, none of the documents are available with the Bank. Sri K.Satyanarayana (A1) produced these documents claiming that they were sent to him by the

Branch, including a certified copy of registered settlement deed which shows that Sri Karri Chandra Sekhar Reddy possessed Ac.7.20 cents.

The investigation further disclosed that the above documents were seized from Sri K.Satyanarayana (A1) in the presence of Sri Teli

Satyanarayana Murthy, Head Master, ZP High School, Bhimavaram

Mandal and Sri A.Srinivas, VRO, Anaparthi and Sri J.V.R.Krishnam

Raju, Junior Assistant, which discloses that all the documents are fictitious. During the year 2010-2011, Smt.Goluguri Aruna, Sri Tadi

Venkata Reddy, Sri Tadi Chandra Reddy, Sri Tadi Venkata Reddy and

Smt.Tetali Sri Lakshmi are in possession of the land to an extent of 3.64 cents in S.No.173, Anaparthi. Smt.Goluguri Aruna claimed that she received Ac.0.74 cents from her mother Smt.Karri Varalakshmi and her father Karri Subba Reddy confirmed this fact. Sri Tadi Chandra

Reddy claimed that his father and brothers purchased Ac.2.40 cents and the same was equally shared by them in the year 1980. He purchased the share of his brother Sri Tadi Rama Reddy and his daughter in law purchased the share of Sri Tadi Venkata Reddy. The

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 28 above witnesses stated that they do not know any person by name Sri

Karri Chandra Sekhara Reddy and they have not seen any person by showing the photograph affixed in the opinion report of Sri M.Ramana

Rao (A4) and Sri Ch.Chalapathi Rao (A2). Sri Pampa Srinivasa Rao,

VRO, Pandalapaka stated that there is no person in the name of Karri

Chandra Sekhara Reddy at Pandalapaka village of East Godavari

District.

The investigation further reveals that the settlement deed vide document No.124/1950 executed by Sri Nallamilli Venkata Reddy and others, submitted by Sri Karri Chandra Sekhar Reddy, the total extent of land was corrected as “13.64” from “3.64” by inserting “1” before “3” in page No.3. In page No.2 and 4, the number “1” has been corrected as “7”. Similarly in page No.4 of the said settlement deed, the words “ఒక ఎకరా ఇరువది” were altered as if the total extent of the schedule property is “ఏడు ఎకరా ఇరువది . Certified copy of the above settlement” deed and Encumbrance Certificate which were obtained from SRO,

Biccavole and examination of Sri Jampana Venkata Rama Krishna

Raju, SRO, Biccavole, confirmed that the original Doc.No.124/1950 was manipulated to enhance the total extent as well as the extent gifted to Sri Karri Chandra Sekhara Reddy. Thus, the original document is genuine, Sri Karri Chandra Sekhara Reddy did not possession of the same during the year 2010-2011 and in order to cheat the Bank, the documents were tampered.

The investigation further revealed that Sri K.V.Murali Mohan,

Panel Valuer submitted report on 21.12.2010 reported that he inspected the above property on 20.12.2010 by perusing the document

No.124/1949 and assessed its market value as Rs.1,18,80,000/- and distress sale value at Rs.97,20,000/-. In pursuance of criminal

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 29 conspiracy, Sri M.Ramana Rao (A4 ) and Sri Ch.Chalapathi Rao (A2) certified as if they inspected the above property on 21.12.2010 and assessed the reasonable value at Rs.80,00,000/-. As per the legal opinion of Sri V.V.R.Subrahmanyam, Valuation Report of Sri K.V.Murali

Mohan and the certificate given by Sri M.Ramana Rao (A4) and Sri

Ch.Chalapathi Rao (A2) are false. They were accepted by them and

A1 only with a view to accommodate A5 who is Managing Director of

VNR Refineries Pvt. Ltd., to secure the enhanced or renewed limits.

The investigation further revealed that on 22.08.2011, Sri

M.Venkata Narayana Reddy (A5) made a request with the Branch

Manager, State Bank of India, Anaparthi for allowing adhoc limit of

Rs.1 Crore, claiming that it would be repaid in 45 days and they would submit proposals for renewal along with audited financials for the period 2010-2011 by 30.09.2011. On the basis of his request, the then

RMME Sri K.Satyanarayana (A1) and Sri J.Chandra Sekharam, the then Regional Manager, State Bank of India, RBO, Kakinada made a proposal dated 23.08.2011 recommending sanction adhoc limit of Rs.1 crore for a period of 45 days over and above the existing cash credit limit reporting that the company had to honour the ILC payments as the receivables struck in the pipe line. He also reported that to meet the working capital gap for full capacity utilization of plant, the company proposed to approach the Bank for enhancement of working capital limits along with audited financials for 2010-2011 by 30.09.2011. They also reported certain irregularities in the conduct of accounts sanctioned on 21.12.2010. The proposal was presented by Sri

K.Satyanarayana (A1) to the Circle Credit Committee-II, LHO,

Hyderabad through Video conference on 26.08.2011 vide Agenda item

No.27 VSP 2011-12-16-377. The Circle Committee-II rejected the

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 30 above proposal as “withdrawn”, directing the Branch to resubmit the proposal after the existing Term Loan is regularized. They also instructed the Branch to stop issue of fresh LCs and explore the possibility for additional collateral security. The decision sheet dated 26.08.2011 of CCC-II containing the above instructions was received at

Regional Business Office on 09.09.2011. A4, A7 and A2 established the following Lcs at the request of A5, exposing the bank to the tune of

Rs.1,27,34,800/-.

a. LC No.28, dated 29.08.2011 for Rs.30,28,480/- signed by Sri

P.Subba Rao & Sri M.Ramana Rao.

b. LC No.30, dated 02.09.2011 for Rs.52,13,520/- signed by Sri

M.Ramana Rao & Sri Chalapathi Rao.

c. LC No.32, dated 13.09.2011 for Rs.44,92,800/-(document not available).

Total Rs.1,27,34,800/-.

M/s VNR Refineries Pvt. Ltd (A6) did not honour the State Bank of India, Anaparthi Branch closed these three on 02.03.2012, 13.02.2012 and 26.12.2011 respectively by debiting the amounts to the cash credit account of A6.

The investigation further reveals that during the course of his enquiry, Sri Eswara Prasad Tiwari, AGM, Audit, LHO, Hyderabad obtained written statement of Sri K.Satyanarayana (A1), wherein it was claimed that the decision dated 26.08.2011 of CCC-II regarding rejection of proposal for sanction adhoc limit of Rs.1 Crore to M/s VNR

Refineries Pvt. Ltd. (A6) was orally informed by A1 to Sri

J.Chandrasekharam, the then RM, RBO, State Bank of India,

Kakinada. A1 claimed that Sri J.Chandrasekharam stated that “General

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 31

Managers say like that only, we cannot scuttle the unit and make it an

NPA”. A1 also claimed that he had informed the Branch Manager (A2) over phone for which Branch Manager told that the matter would be discussed with the Regional manager. A1 further claimed that he received the Decision Sheet only on 09.09.2011 and on the same day, he forwarded a copy of it to the Branch for further necessary action.

Sri J.Chandrasekharam, the then RM, RBO, State Bank of India,

Kakinada claimed that Sri K.Satyanarayana did not inform him the decision of CCC-II. The AGM, CCC Secretariat, LHO, SBI, Hyderabad by name Sri Kotamraju Lakshmi Kantha Rao, informed that when the committee had instructed to stop issue of fresh LCs since A1 himself presented the proposal through Video Conference even though knowing the decision of the committee, he should have communicated the same to the Branch Manager in writing instructing them not to issue fresh Lcs. When the Branch was aware that the proposal for sanction of adhoc limit was pending, they should have waited for the decision.

A1 did not send any written communication to the Branch on 26.08.2011 directing the Branch not to issue fresh LCs and the fact LC

No.32, dated 13.09.2011 was established after the receipt of the

Decision Sheet dated 26.08.2011 from CCC-II on 09.09.2011 at RBO,

Kakinada, indicate that A1, A2, A4 and A7 were in conspiracy to show wrongful favours to A6. A1 was responsible for monitoring the accounts and had access to Core Banking System to monitor did not object to issue of the LCs after rejection of CCC-II on 26.08.2011.

The investigation further revealed that the transfer of cash from

Cash Credit Account to Current Account of the party are not permitted.

Similarly heavy cash withdrawals also not permitted. In pursuance of criminal conspiracy A4 and A7 allowed transfer of the amounts from

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 32 the Cash Credit A/c No.30901617711 to Current Account

No.30637887824 of A6, A2 and A1 deliberately did not object the above transfers/withdrawals thereby failed to ensure proper end use of funds.

Sl.No. Cheque Date AmountPassed by Nature of entry No.

128710124.09.20096,00,000M.Ramana Transferred to RaoCurrent Account of 228710520.10.20099,00,000 M/s VNR Refineries 328710928.10.20096,00,000Not known Pvt. Ltd. 428711030.10.20096,50,000M.Ramana 528711309.11.20098,00,000P.Subba Rao 62811410.11.200915,50,000 - do- 72811716.11.200921,50,000 Not known 828712018.11.200911,00,000 M.Ramana 92812904.12.200913,00,000 Not known 102813514.12.200914,50,000 1128713918.12.20096,50,000M.Ramana Rao 1228714022.12.20096,50,000 1328714224.12.200912,40,000 M.Ramana 1428714329.12.20097,00,000Not known 1528714808.01.201012,90,000 P.Subba Rao 1628714912.01.20106,00,000 1728715013.01.20106,50,000 1828715327.01.20106,22,000M.Ramana Rao 1928715401.02.20104,85,000 2028715503.02.20106,30,000 2128715926.02.201040,00,000 2228716003.03.201040,00,000 2328716111.03.201037,00,000 2428716518.05.20104,00,000 2528716925.05.20105,00,000

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 33 2628717003.06.20104,50,000 2728717210.06.201011,00,000 Not known 2828717312.06.201030,00,000 -do- 2928718026.06.20108,50,000M.Ramana Rao 3028718228.06.201011,00,000 3128718605.07.201011,50,000 P.Subba Rao 3228719113.07.201011,00,000 M.Ramana Rao 3328719320.07.201015,00,000 3428719727.09.201015,00,000 P.Subba Rao 3528719904.11.20104,00,000M.Ramana 3610614628.09.201011,00,000 Not known 3710614915.11.201010,50,000 M.Ramana Rao 3810615524.12.201010,00,000Cash received by Sri Sandeep Reddy 3935238410.01.201127,00,000 4035240326.02.20114,00,000Not known 4135243923.05.20113,00,000P.Subba Rao 4235245724.09.20111,00,000Not known 4335246429.09.201116,00,000 P.Subba Rao

Total 4,05,17,000

In respect of the last six entries, Sri Sandeep Reddy, the then clerk, M/s VNR Refineries Pvt. Ltd., confirmed to have received the cash against the above cheques and handed over to A5. It is found that from the cash credit account, A5 either transferred funds to the current account of M/s VNR Refineries Pvt. Ltd., or received money in cash.

The investigation further revealed that even A4 and A3 also authorized transfer of funds from Term Loan Account No.30725577979 to the current Account No.30637887824 of A6 without obtaining bills in

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 34 support of the payments made towards capital expenditure and invoices pertaining to the purchase of plant and machinery etc.

Sl.No.DateAmount Recommended byApproved by 128.03.200927,00,000-No authorization 202.04.20095,00,000- 307.04.20092,00,000- 413.04.200916,00,000M.Ramana RaoN.V.Ramana Rao 502.05.20093,00,000 604.05.200912,00,000 715.05.200928,00,000 826.05.20093,00,000 904.06.20092,00,000 1019.06.200917,00,000N.V.Ramana Rao 1101.07.200911,00,000Not known 1213.07.200930,00,000-N.V.Ramana Rao 1321.07.200914,00,000-Not known 1427.07.20099,00,000M.Ramana Rao 1501.08.20094,00,000- 1627.08.20094,50,000M.Ramana Rao- 1714.08.20096,50,000-

The investigation further reveals that A6 represented by A5 connived with A1, the then RMME, Sales Hub, State Bank of India,

RBO, Kakinada, A2 and A3, the then Branch Managers and A4 and

A7, the then Assistant Managers (Advances), State Bank of India,

Anaparthi, availed various credit limits i.e., Term Loan – I & II, Standby

Line of Credit, Working Capital and Letter of Credit concealing the facts relating to possession of properties offered as security and by getting the signatures of Mallidi Veeraraghava Reddy (died) and Smt. Mallidi

Bullemmai forged, despite knowing very well that Sri Mallidi

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 35

Veeraraghava Reddy was not alive, and some of the properties were already mortgaged to State Bank of India, Commercial Branch,

Kakinada for the credit limits sanctioned to M/s Balagam Reddy and others. A5 also arranged additional security in the form of Ac.7.20 cents in S.No.173, Anaparthi in the name of Sri Karri Chandra Sekhar

Reddy on the basis of tampered documents. In pursuance of the criminal conspiracy, abusing their official position, Sri K.Satyanarayana (A1), A2 to A4 and A7 facilitated M/s VNR Refineries Pvt. Ltd., in availing the limits by violating the extent rules and regulations, overlooking the instructions of the sanctioning committees and not conducting inspection of the collateral securities offered by the borrowers / guarantors. They falsely certified in the records / documents as if all the guarantors appeared at the Bank and signed and they had explained the contents to them. They facilitated M/s VNR

Refineries Pvt. Ltd., (A6) represented by A5 in availing credit facilities and exposed State Bank of India, Anaparthi Branch to a wrongful loss to the tune of Rs.9,19,51,000/- which is still outstanding as on date, on account of Term Loan – I & II, Standby Line of Credit, Working Capital and letter of credit. Hence, CBI filed charge sheet against the A1 to A7 for the offences U/Sec.120-B r/w 420, 468, 471, 477-A of IPC and

Sec.13 (2) r/w 13 (1) (d) of PC Act, 1988.

3. One of my learned Predecessor has taken the case on file and furnished the copies of case documents to all the Accused. When the

Accused were examined under Section 239 Cr.P.C, they pleaded not guilty.

4.The learned Public Prosecutor and the learned defence counsels appeared for A1 to A7 were heard regarding the charges, charges framed for the offences U/Secs.120-B, 420, 468, 471 and 477-A

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 36 of IPC against A1 to A7 and Section 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988 against the Accused A1 to A4 and A7. On considering the above charges framed by one of my learned predecessor against A1 to A7 were read over and explained to them in

Telugu and all the Accused pleaded not guilty to the respective charges against them and claimed to be tried. In support of their case, the prosecution examined PW1 to PW41 and exhibited Ex.P1 to

Ex.P188.

5. On substantiating the prosecution evidence, A1 to A7 were examined by my learned predecessor under Section 313 Cr.P.C regarding incriminating evidence appearing against them in the prosecution evidence. A1 to A7 denied the same and reported no evidence in their defence. Only two exhibits Ex.D1 and Ex.D2 were marked on their behalf.

6.Arguments of both sides were heard.

7.The Accused A1 to A7 filed written statements under Section 243(1) Cr.P.C.

8.Now the point for consideration is:

1. Whether there is a valid prosecution sanction order to prosecute with the matter against A1 to A4 and A7

Bank employees as prayed for?

2. Whether the properties given towards collateral security for the loan of A5 and A6 are fake or forged documents ?

3. Whether there is a criminal conspiracy on the part of the Accused A1 to A7 ?

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 37

4. Whether A1 to A7 in furtherance of said conspiracy have cheated the Bank punishable U/Sec.420 IPC ?

5. Whether the prosecution has established offence U/Sec.468 IPC and 471 of IPC against A1 to A7 beyond all reasonable doubt ?

6. Whether the prosecution has established offence U/Sec.477-A of IPC against A1 to A7 beyond all reasonable doubt ?

7. Whether the Accused A1 to A4 and A7 by

disbursing the loan to A5 and A6 have

intentionally and wantonly caused loss to the Bank and pecuniary advantage to A5 and A6 and

thereby committed an offence punishable

U/Sec.13(1) (d) r/w 13 (2) of Prevention of

Corruption Act, 1988 ?

8. Whether the prosecution has proved its case against A1 to A7 beyond reasonable doubt ?

9. To what relief ?

9.To test the truthfulness or otherwise of the charges levelled against the Accused, it is necessary to scrutinize the evidence led by prosecution from its witnesses.

10. PW1 is AGM, State Bank of India, Small and Medium

Enterprises, City Credit Centre, Kukatpally Hyderabad. He conducted an investigation at Anaparthi State Bank of India Branch as per the directions of the General Manager, Vigilance, Local Head Office,

Hyderabad.

11.As per the chief examination of PW1, on 04.05.2012 he commenced his investigation. He found that with regard to VNR

Refineries Pvt Ltd., A5 along with Tetali Srinivasa Reddy, Batturi

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 38

Bhavan Kumar and Mallidi Eswar Reddy incorporated VNR Refineries

Pvt Ltd., in the year 2008 for setting up oil refinery with capacity of 50 tons per day which was located at Vemulapudi Village of Dwarampudi

Mandal, E.G. District. A5 is the Managing Director of VNR Refineries/

A6. The Directors of VNR Refineries are the partners in Balagam

Reddy and others. The Balagam Reddy and others also enjoying credit facilities with the State Bank of India, Commercial Branch,

Kakinada and also partners in Satya Sai Balagam Reddy Oil Pvt. Ltd.

A5 is Executive Director. From the year 2009 M/s VNR Refineries Pvt

Ltd., started production.

12.A term loan of Rs.250 lakhs and cash credit limit of Rs.150 lakhs were sanctioned to VNR Refineries Ltd/ A6 on 14.03.2009 by NCC-II,

Visakhapatnam under Ex.P1 Sanction order.

13.The said sanction order was prepared by A.Vidya Sagar/PW11 and V.Nageswara Rao conducted pre-sanction survey over the properties. It does not contain the request of M/s VNR Refineries and bank proposal. On 19.02.2010, the next proposal was approved by

NWCC-II, Visakhapatnam under the same standby line of credit for

Rs.20 lakhs, term loan-II of Rs.80 lakhs and letter of credit limit of

Rs.200 lakhs were sanctioned to M/s VNR Refineries to meet part cost of expansion with capacity from 50 tons per day to 200 tons per day under Ex.P2 approval order.

14.It contains the 200 tons of capital to be infused and the branch has to obtain certificate of Charted Accountant for infusion of capital and also certificate of Charted Accountant for reimbursement cost incurred. The said proposal was appraised by K.V.K.K.S Sarma/PW31 and T.V.Mohan/PW9. Before appraising the same, they conducted a pre-sanction survey. On 21.12.2010, the limit was enhanced for CC

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 39

Loan to Rs.450 lakhs standby credit loan up to Rs.20 lakhs and letter of credit loan up to Rs.200 lakhs. The said two standby credit and letter of credit are renewals. It was appraised by Atchutaramayya and recommended by A1.

15.The appraisal was forwarded to CCC-II, LHO, Hyderabad. The

AGM, SME-BU as initiated by letter of management suggesting the team moderately as negative. He rated it SBV. It means it is not eligible for enhancement. However, he made a recommendation basing on reputation of limit standing of the borrower with regard to experience in Agro based industries and collateral coverage of 73.75% and finally it was approved by Chief General Manager vide approval proceedings dated 21.12.2010 of CCC-II LHO, Hyderabad under

Ex.P3, as per Ex.P3 the borrower has to infuse capital of Rs.300 lakhs and collateral security of Rs.50 lakhs.

16.On 26.08.2011, a proposal of sanction of Rs.1 Crore as Adhoc credit limit for period of 45 days was proposed by A1 and recommended by J.Chandrasekharam/PW33. This proposal was declined by CCC-II, LHO Hyderabad. The committee made a stipulation that no further LC should be opened and the term loan will be regularized on refusing Adhoc CC limit for Rs.1 Crore under Ex.P4.

The same was communicated to Regional Business Office, Kakinada on 09.09.2011.

17.Apart from these loans, PW1 verified housing loan of A5 for the purpose of construction of the house bearing D.No.1-112 at

Ramavaram Village to an extent of 338 Sq. Yards of Site. This loan was recommended by N.V.Ramana Rao /A3 the then Branch Manager of Anaparthi Branch. It was sanctioned by Dy. General Manager,

Visakhapatnam. For the purpose of this loan the borrowers obtained

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 40 gift deed in favour of A5 executed by his mother Bullemmai. The link document bearing No.462/1996 was mortgaged with Commercial bank,

Kakinada as security to M/s Balagam Reddy and others. One V.V.R.

Subramanyam, Advocate gave a legal opinion, he stipulated to obtain original document No.462/1996. But this stipulation is not complied with by A3 and Pramod Kumar. Thereby they have legal opinion from

Pepakayala Ramakrishna who opined that the mortgage is not enforceable till the mortgage with Commercial Branch, State Bank of

India, Kakinada is discharged.

18.The Branch Manager is responsible for meticulous southern to the rules and regulations of the Bank in conducting normal banking business. He is also responsible for complying with various guidelines in conduct and monitoring of advances. In case of sanction by higher authorities is responsible for compliance terms and conditions stipulated in the sanction order. He has to conduct pre-sanction inspection along with Field Officer and confirm the valuation of properties offered as security. The Relationship Manager is responsible for conducting pre-sanction, ensuring KYC formalities and compiling opinion reports and obtaining assets and liability statements of borrowers. If the proposal is above Rs.1 Crore, he has to conduct video conference and submit clarification to the sanction authority.

19.M.V.Narayana Reddy /A5 and M.Ramana Rao/A4 have not done survey of collateral security for sanction dated 14.03.2009.

20.M.Ramana Rao/A4 and Chaganti Chalapathi Rao/A2 have not conducted survey of collateral securities for the sanction dated 19.02.2010.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 41

K.Satyanarayana/A1 Relationship Manager has not conducted survey of the properties for sanction dated 21.12.2010.

N.V.Ramana Rao/A3 has not obtained opinion report on

Balagam Reddy and others from Commercial Branch, Kakinada. He also not obtained credit opinion report on Satya Sai Balagam Reddy

Oils Limited from Axis bank, Rajahmundry.

Ch.ChalapathiRao/A2,M.RamanaRao/A4and

K.Satyanarayana/A1 have not obtained Assets and Liabilities statement of borrowers and guarantors.

21.Chalapathi Rao, Branch Manager has obtained mortgage of

Ac.7.20 of land belongs to Karri Chandra Sekhara Reddy of Pandala paka village without ensuring KYC formalities. Karri Chandra Sekhara

Reddy is not existing person in a village. His property is also not in existence. A1 has not obtained pattadar passbook and title deed as stipulated in title report of V.V.R.Subramanyam. EC is also not enclosed to the legal opinion.

22.A1 and A4 allowed the mortgage of property to an extent of

Ac.1.53 cents of land belongs to Mallidi Veera Raghava Reddy who died prior to mortgage. The property is also not available and it is sold as plots prior to mortgage.

23.Term loan of Rs.2.50 Crores was disbursed directly to the current account of VNR Refineries Pvt Ltd instead of making payment to the suppliers. A3 and A4 not obtained Charted Accountant

Certificate to ensure end use of funds. Similarly A1 and A4 disbursed

Rs.80 lakhs to the current account of VNR Refineries Pvt Ltd. A1 and

A4 issued LCs without maintaining proper records. For LC Nos.17,21, 23, 25 and 32, there is no proper record and not given proper

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 42 explanation about the irregularities. A2 and A4 have issued LC.No.20, 22 when the unit has exhausted its limit, like that, he also mentioned other irregularities in his report under Ex.P5.

24.The cross examination of PW1 on behalf of A1 that as per

Ex.P4 General Manager and two Dy.General Manager presenting

CCC-II meeting conducted on 26.08.2011. Minutes were prepared by

Secretary CCC-II. There were no written instructions to RM-1

Kakinada Sales hub Model situated in RBO will report the Regional

Manager and to Branch manager about the withdrawal of sanction and shortage of LCs. In this matter RMME reported the matter to Regional

Manager and to Branch Manager on the same date. He mentioned the same in Ex.P5 personal guarantees and securities were renewed for third time. First time sanction of loan took place on 14.03.2009 second time took place on 19.02.2010 and third time on 21.12.2010. Pre sanction survey of the unit was done by A1 on 19.10.2010. Collateral securities to the worth of Rs.2.83 Crores was assessed by the branch.

CCc-II accepted the value fo the properties and personal guarantees assessed by the branch. The opinion reports submitted by the Bank were also accepted. After CCCC-II meeting held on 26.08.2011 the minutes were communicated to the branch on 09.09.2011. LHO communicated the said minutes to RMME on 09.09.2011 and on the same day it was forwarded to branch. There is no practice to communicate the seen by way of facts to the branch even in the case of any urgency.

25.The cross examination of PW1 made on behalf of 2nd Accused that on 30.01.2010 the application for enhancement of loan of VNR

Refineries was received by CCC Visakhapatnam. On 19.11.2009 A2 joined at Anaparthi. branch as Branch Manager. One Ramesh Babu

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 43 is previous Manager. He cannot say whether the 1st proposal were enhancing the loan was sent by Ramesh babu in October 2009. From 2005 the Core banking system is in existence in State Bank of India.

Core banking system is introduced to connect all the computers of

State Bank of India. The Regional Office officials can see the transactions which are going to take place at Branch Office.

26.He did not see the original proposal under Ex.P2. The original proposal should accompany the particulars of the properties to be offered by the applicant along with assets and liabilities Statement of applicant and co-obligants. After fulfilling the said formalities only, the loan application will be processed at Head Office CPC Visakhapatnam.

As per Ex.P2 the CPC Visakhapatnam did not raise any query with regard to any lapse on the part of State Bank of India, Anaparthi branch. Ex.P4 receipt from State Bank of India Hyderabad office to

Kakinada Regional Business office, State Bank of India on 09.09.2011.

Ex.P4 which is copy of refusal of Adhoc CC limit for Rs.1 Crore does not contain any inward stamp of Anaparthi Branch. He did not verify inward registrar of RBO or of Anaparthi branch. He further stated that

Ex.P4 does not contain any fax number to show that it was sent from

RBO, Kakinada to Anaparthi branch. He did not file any proof to show that by 09.09.2011 Ex.P4 was received in Anaparthi branch. He further stated that a perusal of Ex.P4 does not disclose when it was received by Anaparthi branch and does not contain any covering letter from

RBO Kakinada to show that it was sent Anaparthi branch. He saw the said covering letter at Anaparthi branch by getting it from Kakinada

RBO, but Ex.P5 i.e. his report does not contain any recital to that effect.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 44

27.He further stated in evidence that reimbursement mentioned in

Ex.P2 means the borrower incurs the expenditure and branch disburses the amount directly to the account of customer basing on the bills receipts physical verification of the unit and also basing on CA certificate. The reimbursement amount will be issued in case of escalation of price. At Page No.19 of Ex.P2 mentions that CA certificate has been obtained regarding cost incurred on the project and its means of finance charted engineers certificate has been obtained confirming completion of project. Based on confirmation certificate issued by Anaparthi branch it was mentioned in Page No.19 of Ex.P2 that CA certificate was obtained. He has not seen the confirmation certificate issued by Anaparthi branch. Ex.P2 approval order does not contain any recital to obtain bills and receipts.

28.He did not verify CPC, Visakhapatnam documents relating to loan granted to A5 and do not know whether CA certificate is available in CPC Visakhapatnam. He did not inspect the property of Karri

Chandra Sekhara Reddy and not visited the MRO office or SR Office to verify the pattadar passbook and title deed of Chandra Sekhara Reddy.

He did not address a letter to Karri Chandra Sekhara Reddy to ascertain whether he is existing or not.

29.Even by 14.03.2009, a mortgage over Ac.1.53 cents of land is in existence by that time A2 was not Branch Manager of State Bank of

India, Anaparthi. The extension of mortgage does not contain the signature of A2. The mortgage of creation of title deeds of Karri

Chandra Sekhara Reddy does not contain the signature of A2.

30.He further deposed that the letters of the credit will be entered in core banking system. By the time of his inspection, all the entries relating to letter of credits mentioned in Ex.P5 are entered in CBS. The

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 45 entries mentioned in CBS will be upto dated on the same date. The transaction of concerned date only will be entered in CBS by mentioning the date of transaction. CBS will be entered pass transactions if the transaction make a mention about the past date.

31.During cross examination by A3, he deposed that the Field

Officer has to collect necessary documents and the same should be forwarded through Branch Manager to CPC Visakhapatnam for sanctioning of loan. Opinion reports, assets and liabilities statement project report and KYC documents are required to be sent for the said purpose. Credit opinion report and valuation reports given by Panel

Valuers and title verification report given by Panel Advocate are included in Opinion Reports. After reaching the file to CPC

Visakhapatnam, it was processed by A.Vidya Sagar and V.Nageswara

Rao by preparing a process note in the present case also, after scrutiny made by said officers it was placed in committee and then only the loan was sanctioned. At the time of preparing the process note, if any document is required they called for the same from Branch

Manager. If all the documents are in perfect condition then only the committee will sanction the loan. In the year 2012, he conducted enquiry in the year March 2009 the loan was sanctioned. In between 2009 and 2012 internal audit and inspections were taken place. After audit and inspection reports will be submitted by them to Branch office

Corporate office and Head office. He do not remember whether said audit and inspection reports do not contain any adverse remarks with regard to 1st time sanction of the loan amount recommended by A3.

Profile particulars of sister concern of A6 mentioned at Page No.5 of

Ex.P1 were prepared at CPC Visakhapatnam. The CPC can get information either directly from branch or from any as they like. In case

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 46 of non receipt fo pre sanction inspection report for collateral security and other necessary documents the CPC would not process the loan and ask for necessary information from Branch. A3 disbursed only part of the sanctioned loan amount.

32.The cross examination made on behalf of A4 to A7 that he did not pass any adverse remarks against A7 in Ex.P5 investigation report.

33. PW12 deposed in his evidence that he worked as Manager cum Credit analyst, Centralized processing centre, SBI

Visakhapatnam. Under Ex.P1 NWC-II Visakhapatnam sanctioned

Rs.150 lakhs CC limit and Rs.250 Laks terms loan limit to A6 sanctioned letter was signed by Chief Manager. the business of A6 company is Rice bran oil manufacturing. They sent Ex.P1 to State

Bank of India Anaparthi branch for further action. Annexure B (3) contains the details of collateral security is missing from Ex.P1 file when it was placed before him. Ex.P32 is sanction letter issued by

SBI, Anaparthi branch addressed to A6 and signed by A3. The said letter relates to sanction of limits by NCC-II to A6. They received proposals from Branch along with xerox copies of documents submitted by the borrower with recommendations of the branch.

Ex.P30 is a letter addressed by A6 to State Bank of India, Anaparthi requesting the sanction of limits and it was signed by A5. It is the responsibility of the Branch Manager and Field officer to see that the terms and conditions of the loan are fulfilled. The Field officer will do the pre sanction survey of the unit. The Field officer has to inspect the property offered for security. The Branch Manager and Field officer have to conduct a post sanction survey and it should be made after sanction of loan and before disbursement of the loan amount. A3 is

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 47

Branch Manager and A4 is the Field officer of State Bank of India,

Anaparthi branch.

34.During cross examination made by A2, he deposed that if the loan was sanctioned under reimbursement scheme, the loan amount can be transferred from term loan limit to current account by the branch subject to sanction by NCC-II. Ex.P2 was sanctioned under reimbursement by NCC-II.

35.During cross examination made by A3, he deposed that at the time of sanctioning of present loan, he was in CPC, Visakhapatnam.

They processed the documents and sent loan file to NCC-II, in turn they sanctioned the loan. After gone through the file he processed. All the xerox copies of documents collateral security documents legal opinion valuation report and pre sanction inspection report will be forwarded to them for process of file. If they find any defect, they can either return the entire file or call for any necessary document. They did not find any defect in the file at the time of processing. After sanction of loan, he transferred from CPC. He do not know the subsequent events. He received the letter dated 30.12.2008 under

Ex.P30 along with loan file. NCC-II also after satisfying with the documents of loan file only, they sanctioned the loan. The legal opinion and valuation report, xerox copies would contain the particulars of document submitted by borrower and co obligate i.e., whether originals are photostat copies are submitted for legal opinion.

36.He further deposed that the existing loan can be enhanced by taking further collateral security and it can also be enhanced if the existing security is sufficient to enhance the loan limit. At the time of enhancing of loan limit, the entire process with regard to pre sanction inspection and other requirements should be followed. If any defect is

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 48 found with regard to documentation of previous loan, at the time of enhancement of loan limit, no enhancement will be made. If the borrower came forward to offer any other property for security in such a case, they agreed to enhance the loan limit in spite of previous defect but it should be rectified. The question of non disbursement of loan amount once sanctioned does not arise. In case of any defect with regard to sanction the previous loan the enhancement of loan limit will not be made.

37.Another important witness of scrutiny is PW11 A.Vidya Sagar,

Retired Chief Manager, State Bank of India who spoke about the sanction of loan dated 14.03.2009 under Ex.P1, deposed that NWC-II,

Visakhapatnam sanctioned Rs.150 lakhs CC limit and Rs.250 lakhs term loan limit to A6. Sanction letter was signed by Chief Manager.

They sent Ex.P1 to State Bank of India, Anaparthi branch for further action. Annexure-III (b) which contains details of collateral security is missing from sanction order under Ex.P1 file when it was placed before him.

38.He further stated that Ex.P32 is the sanction letter from State

Bank of India, Anaparthi branch addressed to A6 contains signature of

A3. The receipt proposed from branch along with xerox copies of documents submitted by borrower with recommendation of the branch.

Ex.P13 is the letter from A6 to the Branch Manager, State Bank of

India, Anaparthi by requesting the sanction of limits. It was signed by

A5. It was responsibility of the Branch Manager and Field officer to see that the terms and conditions of the loan were fulfilled. The Field

Officer will do the pre sanction survey of the unit and to inspect the property offered for security. The Branch Manager and Field Officer have to conduct post sanction survey and it should be made after

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 49 sanction of loan and before disbursement of the loan amount. At the relevant point of time, A3 is the Branch Manager and A4 is the Field

Officer.

39.During cross examination made by A2, he stated that if the loan was sanctioned under reimbursement scheme, the loan amount can be transferred from term loan limit to current account by the branch subject to sanction by NCC-II. Ex.P2 was sanctioned under reimbursement by NCC-II.

40.The cross examination made by A3 deposed that at the time of sanction of present loan he was in CPC, Visakhapatnam. They processed the documents and sent the loan file to NCC-II, in turn they sanctioned the loan. He gone through with the file and processed. All xerox copies of documents collateral security, legal opinion, report of valuation and pre sanction inspection report forwarded to them for process of file. If they find any defect, they can either return the entire file to Branch or to call for any necessary document. They did not found any defect in the file at the time of processing. After sanction of loan, he transferred from CPC and as such, he do not know about the subsequent events. He further deposed that they received letter dated 31.12.2008 under Ex.P30 which is letter from A6 to the Branch

Manager, State Bank of India, Anaparthi along with loan file. NCC-II also after satisfying with the documents of the loan file only will sanction the loan. The legal opinion valuation report xerox copies would contain the particulars of the documents submitted by borrower and co-obligant i.e. whether originals or photostat copies are submitted for legal opinion. The existing loan can be enhanced by taking further collateral security and it can be enhanced if the existing security is to enhance the loan limit. At the time of enhancing of loan limit, the entire

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 50 process with regard to pre sanction inspection and other requirements should be followed. If any defect is found with regard to documentation of previous loan at the time of enhancement of the loan limit, no enhancement will be made. If the borrower came forward to offer any property for security in such a case, they agreed to enhance the loan limit in spite of previous defect. But it should be rectified. The question of non disbursement of loan amount once sanction does not arise. In case of any defect with regard to sanctioning of previous loan, the enhancement of loan limit will not be made.

41. The evidence of PW31, he deposed in chief evidence that his duties were processing of loan applications received from Branch, verification of prima-facie eligibility of loan applicants and compliance of relevant rules and regulations prescribed by State Bank of India, RBI and government. A6 company was existing customer of their bank as per the documents received from SBI, Anaparthi Branch. On 28.08.2009, A6 company requested SBI Anaparthi for enhancing working capital limit for their project and the same was forwarded by

Branch Manager, Anaparthi through letter dated 24.09.2009 under

Ex.P29. A6 submitted a request letter to the Branch Manager, SBI

Anaparthi under Ex.P118. They sought for some clarifications from

SBI, Anaparthi through letter dated 06.11.2009 under Ex.P32. In turn the Branch Manager, Anaparthi sought for clarifications from A6.

Under Ex.P119, A6 company addressed a letter dated 18.11.2009 to

Branch Manager, SBI Anaparthi.

42.He further deposed that on 10.12.2009, himself, Chief Manager,

Central Processing Cell, PW9 proceeded to Vemulapalli village,

Dwarampudi mandal for physical verification of factory and status of affairs. They made certain observations on verifications and the same

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 51 were incorporated in pre sanction survey report in Ex.P113 in Page

No.37 dated 10.12.2009. Subsequently, they processed the loan application of A6 and submitting report to loan sanctioning authority

CCC-NW2, Visakhapatnam for sanction. On 19.02.2010, the proposal was accepted and accorded sanction. After the sanction, they communicated to Branch Manager, Anaparthi for disbursement of the loan after ensuring due compliance of sanction conditions and observations of sanctioning authority under Ex.P2 letter dated 19.02.2010 to the Branch Manager, Anaparthi.

43.The cross examination of PW31 made by counsel for A2. He deposed that as per Ex.P2 network credit committee has sanctioned term loan-II of Rs.80 loans to A6 company. It is a reimbursement loan.

The reimbursement loan amount can be credited to current account of borrower. As per the certificates issued by V.V.Satyanarayana,

Charted Accountant in Ex.P40 in Page No.42 to 49, the borrower complied with the conditions imposed by loan sanctioning authority with regard to capital infusion of Rs.2 Crores before disbursement.

44.The chief evidence of PW33 he deposed that he worked as

Regional manager, RBO Kakinada from November 2008 to October 2011. He was Head of the Region, administering about 50 branches and he was the key person to drive business vide branches in various fields like deposits, advances and profit growth. A1 worked as Medium

Enterprises Relationship Manager in RBO SBI Kakinada. He was head of the Regional Office, SBI, Kakinada. He was one of the subordinate in RBO. A1 was allotted 5 branches or so and directed to interact with

Managers of the industries concerned to procure business above Rs.1

Crore. The responsibilities of MERM are ..

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 52 (1)To have focus attention for the business in the industrial area and to get more business for the bank and extending qualitative services to those industrial units and to cater their needs.

(2)To obtain the loan applications and related documents from prospective borrowers and to process and analyze the loan applications submitted by prospective borrowers and to submit proposals along with his recommendations to respective credit committee4s for sanctioning of loans.

(3)To monitor, supervise and inspect the industrial units who have obtained loans from their bank on ongoing basis. He has to obtain stock statements and verify the stocks physically.

(4)He is responsible for bringing any irregular features in the conduct of the accounts under his supervision to the notice of respective higher authorities.

(5)He has to keep all the documents submitted by borrowers in the branch concerned.

(6)He has to ensure end use of the funds.

(7)To submit the applications of borrowers for adhoc/excess drawings to the respective credit committees for their approval.

45.The credit committees hold meetings on regular basis and process the proposals sent by Medium Enterprises relationship

Manager through Video conference. MERM participates in those video conferences. After holding VC with MERM, the credit committee takes decision and informed to MERM and send communication in writing.

A1 being MERM prepared proposals for adhoc grant of Rs.1 Crore basing on application submitted by A6 company.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 53

46.M/s Balagam Reddy and others is sister concerned of A6.They availed the loans from Commercial Branch, Kakinada. In Ex.P41 the proposals submitted by A1 when A6 applied for adhoc excess drawings of Rs.1 Crore. Basing on the proposal of A1, he recommended adhoc excess drawings of Rs.1 Crore. A1, his credit support officer and himself put their signatures in the proposal and submitted to CCC. The credit committee made following endorsements while withdrawing the proposal for adhoc extra drawings mentioned in Page No.2 of E.P41 as follows :

(1)Lease resubmit the proposal after the existing term loan is regularized.

(2)Stop issuing fresh letter of credit.

(3)Explore the possibility for additional collateral security.

A1 did not bring to their notice regarding the above referred observations of CCC.

47.He was cross examined by A1, he deposed that he stated before the CBI that the Regional Manager was entrusted with the responsibility of giving his comments on irregular reports put by

Relationship Manager to committees concerned which sanctioned the advance and that further wherever units requests for adhoc limits

Relationship Manager of Medium Enterprises should obtain recommendations of Regional Manager before submitting the note to the committee. As per the role manual under Ex.P41 Appendix-1 Page

No.65 the role of AGM under whom RMME has been posted ...

(1) He monitors functioning of R.M. Teams placed under him and ensure that they are discharging their roles and responsibilities as

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 54 laid down and if there are any deviations he will arrange for course correction.

(2)He interacts with Branch functionaries and controllers to undertake resolution of the operational constraints faced by

Relationship Manager (Medium Enterprises) Team.

48.As per Appendix-I page No.65 of Ex.P41, the Branch Manager whose branch is linked with Relationship Manager of Medium

Enterprises sales hub ensures that the customer is facilitated carrying out transactions related activities at the branch. Anaparthi branch of

SBI is not linked to Small and Medium Enterprises credit centre.

49.He deposed that as per the role manual under Ex.P41,

Relationship Manager Medium Enterprises is not under obligation to give information to Branch concerned either orally or in writing about the decisions taken by CCC. A show cause notice was issued to him in connection with the subject account and other accounts and he faced departmental enquiry in connection with irregularities taken place in respect of other accounts. He further deposed that as per 1st page of Ex.P4, the decisions taken in CCC on 26.08.2011 were communicated by SBI, RBO on 09.09.2011. The copy of 1st page of

Ex.P4 was sent by Anaparthi branch.

50.The chief evidence of PW34 who worked as Asst. Manager,

Advances SBI, Anaparthi Branch from 2011 to 2014 deposed that his duties are maintaining SME advances port folio of the branch, holding custody of documents relating to SME loans of the branch. In the year 2012, himself and PW32 went to CBI office Visakhapatnam and handover the documents. Himself and A7 worked during the same period in SBI Anaparthi branch. By the time A1 was working as

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 55

Relationship Manager Medium Enterprises, RBO SBI Kakinada. He got acquaintance with the signatures of A1 and A7. He identified the signatures of A1 in Ex.P3, Ex.P32 and Ex.P45. He also identified the signatures of A7 in Ex.P68, Ex.P74, Ex.P86, Ex.P87, Ex.P91 to

Ex.P93, Ex.P96 and Ex.P105. A7 authorized the cheques under

Ex.P68, Ex.P74, Ex.P86, Ex.P87, Ex.P91 to Ex.P93, Ex.P96, P105.

A7 countersigned the Ex.P125, Ex.P142 and Ex.P143. Ex.P147 contains the signature of A1. He also identified the signatures of A7 in

Ex.P166 which is proof of passing, authorizing the cheques and vouchers.

51.During cross examination made by A3, he deposed that he took charge from A4 about 10 years back. He do not remember whether A4 handed over all the documents and records pertaining to A6 company to him or not.

52.During cross examination made by A7, he deposed that Ex.P68,

Ex.P74, Ex.P86, Ex.P87, Ex.P91 to Ex.P93, Ex.P96 and Ex.P105 cheques were passed by A7 during normal course of business. The amount covered by letter of credit bearing No.32 was debited to the

VNR Refineries account on 13.09.2011 and letter of credit bearing

No.32 was closed on 27.12.2011 since the amount was received on 26.12.2011. Ex.P125, Ex.P142 and Ex.P143 contains of A4 also.

SME-7 and 5 form need not contain the signature of borrower, as such, they did not obtain the signatures of borrowers in Ex.P125, Ex.P142 and Ex.P143. SME-5 form is meant for primary mortgage, SME-7 for extension of mortgage and those were obtained after committee approved the loans.

53.The evidence of PW32, he deposed in chief evidence that as per the request of Inspector of CBI, Visakhapatnam, he furnished the

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 56 documents pertaining to the present case. He handover the documents under receipt dated 08.04.2012 under cover under Ex.P120 and Ex.P121. He handover the Ex.P122 to Ex.P127 and also handover Ex.P4, Ex.P30, Ex.P32, Ex.P49, Ex.P118, Ex.P119, Ex.P155 to Ex.P177. Cheque bearing Nos.287101, 287105, 287109, 287110, 287113, 287114, 287117, 287120, 287129, 287135, 287139, 287140, 287142, 287143, 287148, 287149, 287150, 287153, 287154, 287155, 287159, 287160, 287161, 287182, 287183, 287186, 287191, 287193, 287195, 287197 and 287199 which are part of Ex.P166 are issued for transfer of funds from cash credit account of VNR Refineries to current account of company.

54.He further deposed that under cover of Ex.P171 vouchers and cheques, the funds were transferred from the current account of A6 to housing loan of one M.V.Narayana Reddy. The list of Ex.P171 is annexed to Ex.P172. Ex.P175 is maintained for noting the issuance of letters of credit by their bank to customers. The Field officer of the bank maintains the registers of letter of credits. Ex.P175 shows 34 letter of credits were given to A6 which is bearing No.28, 30, 32, 21, 26, 29 and 31 for Rs.44,17,920/-.

55.During cross examination made by A1, he deposed that all the documents which were filed were collected from Anaparthi branch by their bank. He deposed that before issuance fo letter of credit, two bank officers have to put their signatures. He has not stated the names of two bank officers who signed on letter of credit No.21. He further deposed that he stated before the CBI that the signatures in letter of credit No.26, dated 19.08.2011 and 29, dated 29.08.2011 and 31 dated 09.09.2011 are the genuine signatures of A7, A2 and A4. He further deposed that cash withdrawals from current account for making

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 57 payments towards labour charges and to meet petty expenses cannot be construed as diversion of funds.

56.He further deposed that the cash withdrawals appearing in the current Account No.30637887824 cannot be construed as diversion of funds since there was lot of activity as seen from the current account that the payments to various suppliers and receipts from the buyers and that however, they have to see the books of accounts of the firm

before arriving at final conclusion regarding the inch of amounts to the

current accounts.

57.During cross examination by A7, he deposed that LC No.28 for

Rs.30,28,470/-, LC.No.30 for Rs.52,13,520/- and LC.No.32 for

Rs.44,92,800/- were closed on 02.03.2011, 13.12.2011 and 26.12.2011 respectively by debiting to the cash credit account of A6.

He further deposed that Ex.P125 which deals with extension of mortgage is prepared by the bank and there is no necessity to obtain signatures of the borrowers. It will be prepared by the 1st signatory who is the concerned official. The second signatory need not be the concerned official. A cheque will be honoured subject to drawing power of that particular account. Ex.P125 (SME-7 form) will be prepared by the 1st signatory at the time of enhancement of the loan limit but not by the owner.

58. Asst. General Manager, SBI examined as PW22. He deposed that he worked as Chief Manager in the year 2013. Cash credit limit

is given for the purpose of working capital for purchase of goods,

raw material etc. Demand promissory note and other documents

will be obtained for securing the loan. The loans are sanctioned

against pledge of rules. Banks do pre sanction survey before

lending loans. Appraisal verification and process of

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 58

documentation will be done during pre sanction. After the loan is

sanctioned, before disbursement they conduct post sanction

inspection.

59. Working capital loans will be given for purchase of goods.

The operating cycle loan will be 12 months. These loans will be

given for the purpose of purchase of raw material, day to day

expenses, wages and salaries.

60. Bank sanctions standby line of credit as an additional loan

above the existing limit (15% of existing limit or maximum Rs.5

Crores) for temporary requirements of the business. The

repayment period will be two months.

61. The letter of credit is a documentary credit issue by bank

on behalf of buyer to the seller for payment of goods and

services.

62. Term loan will be sanctioned for purchase of machinery,

land and buildings repayable in a maximum period of eight years.

63. Opinion reports will be compiled on borrowers and

guarantors by the bank before considering a loan to know the net

worth of the borrower/guarantor.

64. Mortgage means transfer of interest of the immovable

property in favour of the bank as a security for the loan. SME

documentation (SME-V, VI, VII, VIII as the case may be) will be

obtained for mortgage of the property.

65. The loans must be disbursed only after proper complete documentation.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 59

66. Bank branch officials (BM/FO/RMME) are responsible for

ensuring the terms and conditions prescribed by the bank for the

said loan.

67. SBI, Anaparthi branch at the material time was a non BPR

branch. As the amount is more than Rs. 1 Crore they might have

sent it for sanction to their controllers.

68. The said procedure was mentioned in Ex.P112. During

cross examination made by A2, he deposed that reimbursement

of term loan means paying for the expenditure already incurred.

Ex.P112 pertains to the year 2012.

69.The chief evidence of PW24 reveals that at the request of CBI, their office furnished the documents which is Ex.P113 is covering letter from Chief Manager, Visakhapatnam AO, SBI to CBI along with sanctioned copies of loan to A6 which contains assets and liabilities statements of borrowers and guarantors and the certified copies of documents filed contains his signature forwarded by SBI, Anapathi branch contains the signatures of A2 and A3 and loan sanctioned copy of A6 minutes sanctioned copy of committee and other related documents of the loan like inspection report, assets and liabilities statement of A6 and 1st loan sanctioned copy and enhanced loan sanctioned copy for A6. The then Branch Manager recommended for enhancement of loan limit. Ex.P113 also contains resolution regarding enhancement of authorized capital and intimation copy of Registrar of companies.

70.During cross examination made by A3 deposed that he has no acquaintance with A3. Basing on the office copy of documents he took photocopies.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 60

71.The evidence of PW40 in the year 2013 he furnished the

Ex.P180 to Ex.P186 to the CBI under covering letter. He further deposed that A6 was maintained at SBI Branch, Anaparthi which is under the control of RM Kakinada.

72.During cross examination by A1, he deposed that he forwarded 149 sheets relating to M/s VNR Refineries Pvt Ltd., received from

Suryanarayana RME Samarlakota who sits at RBO, Kakinada to inspect CBI, Visakhapatnam. On perusing the file under Ex.P180 does not contain 149 sheets. Generally Anaparthi branch forwards the copies of legal opinions, valuation reports for loan processing by

RMME.

73. POINT No. 1 :Whether there is a valid prosecution

sanction order to prosecute with the matter against A1 to A4 and

A7 Bank employees ?

There is no dispute that A3 is public servant. In this case, PW7 issued sanction order under Ex.P26 for A3. He deposed in his evidence that Chief General Manager is competent authority to pass prosecution sanction order against scale /Chief Manager of State Bank of India. In the present case, who is the Chief General Manager, SBI,

LHO Bank State Hyderabad issued Ex,.P26 sanction order basing on

FIR, statement of witnesses and other relevant documents. As per his evidence, he is a competent person to issue prosecution sanction order against A3 who worked as the then Branch Manager, State Bank of

India, Anaparthi and Branch Manager, State Bank of India, Anaparthi.

It is important to note that Ex.P26 is marked in the evidence of PW7 is

Chief General manager, State Bank of India, Hyderabad during the relevant period.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 61

74.A perusal of Ex.P26 sanction order would show that it was an order made after due application of mind of the officer concerned. It is also evidence of PW7 further as per Sec.114 (e) of Indian Evidence

Act, the Court may presume that official acts have been regularly performed. There is no material on record to rebut the presumption.

Even without the aid of the said presumption, the evidence on record can be held to be sufficient to hold that there is a valid sanction in this case against A3.

75. The contention of A1, A2 A4 and A7 from their written statement in brief is this :-

The contention of A1 to A4 is that the sanction of order under

Ex.P43 against A1 and A4. There is no dispute that A1 and A4 are

Public servants. PW26 Sri Vijaya Jasuja issued a sanction order under

Ex.P43 against A1 and A4 is invalid and illegal. The sanction order under Ex.P27 issued against A2 and A7 is exfacie invalid. He is the

General Manager, Network-III is not competent authority to issue sanction order. The state Bank of India, Anaparthi Branch at the material time falls under the purview of the General manager, Network-

II.

76. PW24 Sri Lopinti Venkata Naveen who is State Bank of India employee deposed in the cross examination as follows :

"There are three networks of his bank with local head office at Hyderabad circle. Hyderabad falls under Network-1, Visakhapatnam and Vijayawada falls under Network-2. There is a separate Administrative

Offices for Vijayawada and Visakhapatnam. Guntur and Tirupathi are covered under Network-3. They too

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 62 have separate Administrative offices. Each Network is headed by a General Manager, Regional Business

Office, Kakinada is under Network-2. Anaparthi is under the control of Regional Business Office,

Kakinada. This was during sanction of loans in this case."

77.The prosecution without proper sanction order is exfacie illegal under PC Act U/Sec.19 (1) (c) of PC Act 1988. The competent authority from Network-II is alone competent to issue prosecution sanction order against the official.

78.The defence counsel cited a judgment in AIR 2005 SC 3606

State of Goa Vs. Babu Thomas. The Supreme court held that -- "As already noticed, the sanction order is not a mere irregularity, error or omission. the first sanction order

dated 02.01.1995 was issued by an authority that was

not a competent authority to have issued such order under the Rules. The second sanction order dated 07.09.1997 was also issued by an authority, which was not competent to issue the same under the relevant rules, apart from the fact that the same was issued retrospectively w.e.f. 14.09.1994, which is bad. The cognizance wa taken by the Special Judge on 29.05.1995. therefore, when the Special Judge took cognizance on 29.05.1995, there was no sanction order under the law authorising him to take cognizance. This is a fundamental error which invalidates the cognizance as without jurisdiction."

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He also reported another judgment AIR 2015 SUPREME COURT 3060 between Nanjappa Vs. State of Karnataka, wherein it was held in Para No.17.

“ In the case at hand, the Special Court not only entertained the contention urged on behalf of the

Accused about the invalidity of the order of sanction, but found that the authority issuing the said order was incompetent to grant sanction. The trial Court held that the authority who had issued the sanction was not competent to do so, a fact which has not been disputed

before the High Court or before us. The only error

which the trial Court, in our opinion, committed was that, having held the sanction to be invalid, it should have discharged the Accused rather than recording an order of acquittal on the merit of the case. As observed by this Court in Baij Nath Prasad Tripathi’s case (Supra), the absence of a sanction order implied that the court was not competent to take cognizance or try the

Accused. Resultantly, the trial by an incompetent court was bound to be invalid and non-est in law ”. Therefore, the entire trial against A1 and A4 is vitiated before this

Court.

He also reported another judgment between D.K.Sharma Vs.

State of Delhi 2025 SCC Online Del 1819 wherein it was held as follows :

The Hon'ble High court discussed the judgment in

Mohd. Iqbal vs. State of AP 1979 4 SCC 172, in Page

No.39 that the grant of sanction is not a mere procedural

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 64 requirement but a substantive safeguard designated to protect government servants from frivolous or malicious prosecutions. The Hon'ble Court emphasized that sanction must be accorded by the competent autholrity after due application of mind and any failure to adhere to this statutory requirement renders the entire prosecution void ab initio. The relevant portion of the same is reproduced below "

3. .. The grant of sanction is not an idle formality or an acrimonious exercise but a solemn and sacrosanct act which affords protection to government servants against frivolous prosecutions and must therefore be strictly complied w9th before any prosecution can be launched against the public servant concerned.

For these reasons, therefore they are satisfied that the present prosecution was launched without any valid sanction and, therefore, the cognizance taken by the

Special Judge was completely without jurisdiction."

40. Applying these principles to the case at hand,it is evident that the sanction for prosecution of the appellant was granted by Director II, CPWD, who was competent authority under the applicable service rules.

As per the CPWD Manual, the Superintending Engineer was the competent authority to remove a Junior

Engineer (Civil) from service and consequently, the only authority empowered to grant sanction under Section 19 of the PC Act. the table from the CPWD Manual which lists the appointing authority, disciplinary authority and

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 65 appellate authority in respect of various group of government servants in CPWD is reproduced below :

41. Since Director II, CPWD had no authority to remove the appellant from service, it follows that he was also not empowered to grant sanction for prosecution under section 19 of the PC Act. The Hon'ble Supreme

Court in C.Nagarajaswamy (supra) has clearly held that only the competent authority can grant valid sanction for prosecution. In the present case, the Superintending

Engineer was the competent authority for the appellant's post and no notification or delegation of powers was ever issued granting such authority to Director II, CPWD. As a result, the sanction in question is legally untenable and lacks jurisdictional validity.

As per Sec.19 (1) - Previous sanction necessary for prosecution : (1) No court shall take cognizance of an offence punishable under Sections 7, 10, 11, 13 and 15 alleged to have been committed by a public servant, except with the previous sanction [save as otherwise provided in the lokpal and

Lokayuktas Act, 2013 (1 of 2014].

(c) In the case of any other person, of the authority competent to remove him from his office.

As per this Section, the appointing authority who is competent to remove the government employee is competent to issue sanction orders.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 66

U/Sec.43(1) of State Bank of India Act 1955 gives power to the

Bank to appoint such number of officers advises her employees as it considers necessary or desirable for the efficient performance of its functions made to determine their terms and conditions of their appointments and service.

79.Regulation 55 of State Bank of India general regulations provide the power of the local board in respect of the staff regulation 55 (2) (a) envisages that appointing and/or promoting authority for various categories/grades of officers and employees shall be such as the executive committee may by general or special order designate from time to time. The operation of Bank is regulated by board of Managing

Directs of the Bank which empowers appointment of committee. The

Managing committee consist of the Chief General Manager and such of the officers designated thereunder. It would appear that the Board or managing committee issues policy directions from time to time. The state Bank of India officers (determination of Terms and Conditions of

Service) Order, 1979 was made in exercise of the aforesaid power under Section 43(1). rule 17 provides procedure for promotion. It envisages that " "Promotions to all grades of officers in the Bank shall be made in accordance with the policy laid down by the

Central Board of the Executive Committee from time to time."

The Executive committee issued circulars from time to time. In 1990, for promotion from MMGS-II to MMGS-III effective from August 1, 1986.

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80. The evidence of PW8 during cross examination the present loan relates to Network-II that covers Vijayawada and Visakhapatnam zone. There is a General Manager for Network-II. He is a General

Manager for network-III covers Guntur, Tirupathi and Nellore. Aswini

Mehta who is no more was the General Manager Network-II during the relevant period. He deposed that the bank authorized him to issue sanction order for Network -II officers upto Scale-III. He did not authorize before the Court or CBI as it will be the Vigilance

Department. He did not also bring any sanction file and

Visakhapatnam, Vijayawada and Rajahmundry will come under the purview of Network-III, stated during cross examination by A1, A2, A4 and A7.

81.As per his evidence, the Bank authorized him to issue sanction for network-II officer upto Scale-III. Even though he did not produce the authorization before this Court, it is available in Vigilance

Department, the evidence is sufficient by presuming that he acted as per the directions of the Bank. A2 submitted the supply of order in respect of his promotion to MMGS-III from MMGS-II, dated 22.08.2009 for reference. This order issued by the Head office, State Bank of

India, Hyderabad only to informing about the promotion signed by the

General Manager, Network-II, but it is not the order copy. As per the banking Act, the Operations of the Bank is regulated by the board of

Managing directors of the Bank.

82.During arguments, the Accused wrongly mentioned the evidence of PW26 (Vijaya Jasuja) and he issued Ex.P43. Actually, the said person by name Vijaya Jasuja was examined as PW8 in the present case and the sanction order is marked as Ex.P27, but not Ex.P43.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 68

State of Maharashtra Through CBI Vs. Mahesh G.Jain in

Crl.A.No.2345 of 2009, dated 28.05.2013.

in para No.16 ---

True it is, grant of sanction is a sacrosanct and sacred act and is intended to provide a safeguard to public servant against vexatious litigation. But simultaneously when there is an order of sanction by the competent authority indicating application of mind the same should not be likely dealt with. The flimsy technicalities cannot be allowed to become tools in the hands of an

Accused.

83. As per the evidence of PW8, the Bank authorized him to issue sanction for network-II officer upto Scale-III. As per Sec.114(e) of the

Indian Evidence Act, the court presume that PW8 acted as per the office of the Bank. There is no material on record to rebut the presumption. As per the judgment supra and evidence on record can be held to be sufficient to hold that PW8 is competent person to issue sanction order against A1, A2, A4 and A7 under Ex.P27. The evidence on record can be held to be sufficient to hold that there is a valid sanction in this case. The point is answered accordingly in the affirmative holding that there is a valid sanction accorded by the competent authority to prosecute the Accused A1 to A4 and A7 before the competent court under the relevant provisions of the Prevention of

Corruption Act, 1988.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 69

84. POINT NO.2 :Whether the properties given towards

collateral security for the loan of A5 and A6 are fake or forged

documents ?

As per the investigation, VNR Refineries Pvt. Ltd., A6 which is private limited company, Sri Mallidi Venkata Narayana Reddy/A5 is a

Managing Director approached the State Bank of India, Anaparthi

Branch for sanction of term loan of Rs.3.50 Crores and cash credit limit of Rs.3 Crores on 30.12.2008 vide letter under Ex.P30. The said proposal was forwarded by N.V.Ramana Rao/A3 Asst. Manager, SBI,

Anaparthi and one Pramod Kumar, the then Field Officer to credit processing cell (CPC), Visakhapatnam, in turn, sent to Network Credit

Committee - II, Hyderabad. The said proposal was approved by

Network credit committee in its meeting dated 14.03.2009 vide Agenda

Item No.2008 -09, VSP - 396 and sanctioned term loan of Rs.2.50

Crores and cash credit of Rs.1.50 crores under Ex.P1 dated 14.03.2009. Subsequently, N.V.Ramana Rao/A3, the then Branch

Manager, Anaparthi conveyed the sanction of loan vide letter dated 20.03.2009 addressed to M/s VNR Refineries Pvt. Ltd. A6 company authorized by M.V.Narayana Reddy/A5 executed the documents relating to term loan and working capital. N.V.Ramana Rao/A3 and

M.Ramana Rao/A4 the then Asst. Manager, SBI, Anaparthi Branch allowed the documentation. On 26.03.2009 M.V.Narayana Reddy/A5,

T.Srinivasa Reddy, M.Eswara Reddy, V.Bhavan Kumar were the directors of V.N.R. Refineries Pvt. Ltd/A6 executed agreement of loan cum hypothecation. On the same day, M.Ramana Rao/A4 the then

Asst. Manager, SBI, Anaparthi Branch prepared memorandum of recording of creation of mortgage of title deeds from mortgagees Sri

M.V.Narayana Reddy/A5, Mallidi Veera Raghava Reddy, Mallidi

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 70

Bullemmai, Mallidi Sunitha, Tethali Srinivasa Reddy, Sri Vatturi Bhavan

Kumar, Sri Vatturi Akshay in respect of the properties.

ItemDescriptionExtentTitle HolderLocation No.

1.EM Factory siteM/s VNR Primary Sold by Sarfaesi EXP- Ac.5.55 cents Refineries177 RS 52, Vemulapalli along with Building, machinery and stocks

2.Residential 338 Sq. YardsSri Mallidi RS No.264/3, D.No.1- BuildingVenkata 112, Ramavaram. Narayana Reddy

3.House SiteAc.1.53 centsSri Mallidi RS No.175/2, Veera Ramavaram village. Raghava Reddy

4.Agricultural Ac.6.09 centsSmt.Mallidi RS No.67 & 50/2, LandBullammaiPekeru

5.Agricultural Ac.3.11½ cts.Smt.Mallidi RS No.35 & 34/2, LandSuneethaMukkinada

6.Residential 436 Sq. YardsSri RS No.672/7A/1A, BuildingT.Srinivasa Anaparthi Reddy

7.Residential Plot 300 Sq. YardsSmt.Vatturi RS No.104, 106, 107, Rajya 108, 181 to 183, 184 Lakshmi(P) & 185 (P), Nizampet,

8.Residential 240 Sq. YardsVatturi RS No.376, 277, 281 & BuildingS.R.Akshay282, Apuroopa Township, Jeedimetla.

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The legal opinion given by Panel Advocate Sri

V.V.R.Subramanyam, Anaparthi in respect of the properties mortgaged on 26.03.2009.

85. The evidence of PW4 he deposed that he gave legal opinion basing on prime documents, link documents and other certificates issued by government authorities, Encumbrance Certificate, and certified copy of prime documents with regard to property concerned.

He scrutinized the documents. In the present case, the clerk of said concerned gave the said documents to him.

86. Item No.1 :

Which is the VNR Refineries factory site to an extent of Ac.5.55 cents in RS.No.52 of Vemulapalli along with building machinery and stocks. For this property PW4 gave a legal opinion by scrutinized the documents Ex.P13 registered sale deed and Ex.P14 registered sale deed dated 18.12.2008.

87. As per Ex.P12 is the legal opinion of PW4 dated 09.03.2009 given in respect of schedule property. Item No.1 property covered by sale deed dated 06.10.2008 purchased by VNR Refineries Pvt. Ltd., vemulapalli village rep. by M.D.Mallidi Venkata Narayana Reddy S/o

Veera Raghava Reddy from Pulagam Balakrishna Reddy S/o Late

Satyanarayana Reddy.

(i)Middle Ac.02.18 1/4 cents in western Ac.12.25 cents out of full extent of Ac.13.31 cents covered by RS.No.52.

(ii)Western Ac.0.83 cents in eastern Ac.01.24 1/2 cents in the middle in the western Ac.12.25 cents out of the full extent of Ac.13.31 cents covered by RS.No.52.

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Into a single contiguous plot of Ac.03.01 1/4th cents. As per the legal opinion under Ex.P12 and the evidence of PW4 the factory having clear title over the property.

88.Property covered by sale deed dated 18.12.2008 purchased by

VNR Refineries Pvt. Ltd., Vemulapalli village rep. by M.D.Mallidi

Venkata Narayana Reddy S/o Veera Raghava Reddy from Pulagam

Balakrishna Reddy S/o Late Satyanarayana Reddy. Which is southern

Ac.02.54 cents in the east out of an extent of Ac.4.09 1/4th cents out of the full extent of Ac.13.31 covered by RS.No.52.

89. Ex.P13 is the true copy of registered sale deed dated 06.10.2008 executed by Balakrishna Reddy S/o Pulagam

Satyanarayana Reddy in favour of Mallidi Venkata Narayana Reddy/

A5 S/o Mallidi Veera Raghava Reddy in respect of property to an extent of Ac.2.18 1/4 cents out of Ac.13.31 cents on western side

Ac.12.225 cents middle in S.No.52 and Ac.0.83 cents in total Ac.3.01 1/4 cents (he purchased the said property from Sathi Prabhakara

reddy and Sathi Ammireddy on 25.09.2000 and from Sathi

Veerayamma on 11.10.2000 and from Padala Ramakrishna Reddy

dated 16.10.2000 and Padala Brahmi Reddy and others).

90. Ex.P14 is the true copy of registered sale deed dated 18.12.2008 executed by Pulagam Ramakrishna Reddy S/o

Satyanarayana Reddy in favour of Mallidi Venkata Narayana Reddy/A5 for an extent of Ac.2.54 cents out of Ac.13.31 cents in S.No.52 (The

Pulagam Balakrishna Reddy purchased the said property from

Dwarampudi Krishna Reddy and others dated 07.09.2000).

91. PW4 stated in the legal opinion that the borrower company/VNR

Refineries got absolute clear and marketable title over the above

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 73 schedule property and title deed is genuine and a valid mortgage can be created. the company applied for conversion of above land for non agricultural purpose. The said application under process with the competent authority.

92. Item No.2 : As per the prosecution case thatLate Veera

Raghava Reddy who is father of M.V.Narayana Reddy (A5) is the owner of the property purchased Ac.1.53 cents in RS.No.175/2 vide

Document No.126/2003 dated 30.01.2003 from Nallamilli Ramareddy.

As per the Encumbrance Certificate No.711, dated 06.06.2013 obtained from SRO, Anapathi, Sri Mallidi Veera Raghava Reddy sold the said land in parts.

(a) Ac.0.50 cents to Sri Medapati Ramalinga Reddy vide

Document No.1166 of 2003 on 11.08.2003.

(b) The remaining Ac.0.095 cents each to Sri Padala Vanama

Reddy and Sri Padala Venkatarama Reddy vide Document No.65/2004 and 66/2004 on 24.01.2004.

(c)House Plot No.1-37/1A - plot ad-measuring 444 Sq. yards sold to Sri Goluguri Veera Raghava Reddy vide Document No.618 and 619 of 2004 on 06.05.2004.

(d)House No.1-37/A of two flats admeasuring 302.22 Sq

Yards each sold to Sri Nallamilli Venkata Reddy on 13.02.2008 vide

Document No.201 and 202 of 2008.

(e)To an extent of Ac.0.253 cents gifted to Smt.Mallidi

Bullammai, vide Document No.1092 of 2004 on 21.07.2004.

(f) Smt.Mallidi Bullammai sold the piece of land on 13.02.2008 as house No.1-387/A – plot admeasuring 568.61 Sq. Yards

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 74 to Sri Kovvuri Veera Venkata Satyanarayana Reddy, vide Document

No.196/2008 and also sold residential house D.No.1-37/A admeasuring 277.29 Sq. yards to Smt.Nallamilli Sujatha vide Document

No.197/2008 and a house No.137/A – plot admeasuring 277.29 Sq.

Yards sold to Smt. Satti Satti Reddy vide Document No.198/2008.

93.Subsequently M/s Sri Tirupathi Venkateswara Traders of

Ramachandra Puram, Nallamilli Venkata Reddy, Padala Veera

Raghava Reddy, Nallamilli Srinivasa Reddy, Smt.Kovvuri Papai, Sri

Kovvuri Sathi Reddy, Sri Kovvuri Rama Reddy, Sri Nallamilli Bhaskara

Reddy, Kovvuri Veera Venkata Satyanarayana Reddy, Smt. Nallamilli

Sunitha, Kovvuri Venkata Krishna Reddy mortgaged the land purchased by them in RS.No.175/2 to Andhra bank, Anaparthi vide document No.53/2012 dated 06.01.2012.

94.As per the above transactions, father of A5 sold the total extent of Ac.1.53 cents in S.No.175/2 of Ramavaram Village to various persons. He has no title in respect of above property to create mortgage vide document No.126/2003 of SRO, Anaparthi before SBI,

Anaparthi branch.

95.The evidence of Panel Advocate PW4 which reveals that he gave a legal opinion under Ex.P15 in respect of property of Mallidi

Veera Raghava Reddy for an extent of Ac.1.53 cents at Ramavaram village of Anaparthi Mandal. He verified Ex.P16 to Ex.P18.

96. Ex.P16 is the original sale deed executed by Nallamilli

Ramireddy, S/o late Nallamilli Satyanarayana Reddy in favour of Mallidi

Veera Raghava Reddy S/o Mallidi Subbireddy (Father of A5) for an extent of Ac.1.53 cents in RS.No.175/2 of Ramavaram village (the

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executant acquired the property under Will dated 22.01.1997

executed by his father Nallamilli Satyanarayana Reddy).

97. Ex.P17 is the EC from 2005 to 2009 relating to property situated in S.No.175/2 to an extent of Ac.1.53 cents (relating to Ex.P15).

98. Ex.P18 is the certificate issued by MRO, in respect of property

Ac.1.53 cents in S.No.175/2 (relating to Ex.P15) is not assigned land and Mallidi Veera Raghava Reddy is the owner and the property is agricultural dry zeroit land.

99. Ex.P46 is the letter dated 10.06.2013 from Sub Registrar by name V.Ramesh babu (LW16) Anaparthi to Inspector of Police, CBI,

Visakhapatnam by showing the attested copy of application submitted by VVR Subramanyam, Anaparthi on 03.01.2009 for issuance of EC in respect of property in S.No.175/2 to an extent of Ac.1.53 cents relating to Malli Veera Raghava Reddy S/o Subbireddy vide document

No.126/2003.

100. Ex.P48 is the letter dated 06.06.2013 from Sub Registrar by name V.Ramesh babu (LW16) Anaparthi to Inspector of Police, CBI,

Visakhapatnam by handing over attested copy of ECs and attested copy of registered sale deeds dated 30.01.2003, and 19.04.2007.

I.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property house

No.1-37/A to an extent of 568.61 Sq. Yards in S.No.175/2. Sri Tirupathi

Venkateswara Traders of Peeraye ramachandrapuram and Nallamilli

Venkata Reddy and Padala Veera Raghava Reddy and others mortgaged the said property to Chief Manager, Andhra Bank,

Anaparthi on 06.01.2012 of Ramavaram Village.

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II.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property house

No.1-37/A to an extent of 302.22 Sq. Yards in S.No.175/2. Mallidi

Veera Raghava Reddy sold the land to Nallamilli Venkata Ramareddy on 13.02.2008 of Ramavaram Village.

III.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property house

No.1-37/A to an extent of 302.22 Sq. Yards in S.No.175/2. Mallidi

Veera Raghava Reddy sold the land to Nallamilli Venkata Ramareddy on 13.02.2008 of Ramavaram Village.

IV.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property house

No.1-37/A to an extent of 277.29 Sq. Yards in S.No.175/2. Mallidi

Bullemmai sold the property to Nallamilli Sujatha dated 13.02.2008 of

Ramavaram Village.

V.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property house

No.1-37/A to an extent of 568.61 Sq. Yards in S.No.175/2. Mallidi

Bullemmai sold the property to Kovvuri Veera Venkata Satyanarayana

Reddy dated 13.02.2008 of Ramavaram Village.

VI.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC plot to an extent of 253

Sq. Yards in S.No.175/2. Sri Mallidi Veera Raghava Reddy executed a gift deed in favour of Mallidi Bullemmai on 21.07.2004. One Mallidi

Veera Raghava reddy sold the house property bearing D.No.1-37/1A to an extent of 448 Sq. Yards in S.No.175/2 to Goluguri Srinivasa Reddy of Ramavaram Village.

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VII.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property house

No.1-37/A to an extent of 444 Sq. Yards in S.No.175/2. Sri Mallidi

Veera Raghava Reddy sold the property to Goluguri Veera Raghava

Reddy on 06.05.2004 of Ramavaram Village.

VIII.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property plot to an extent of 0.95 Sq. Yards in S.No.175/2. Sri Mallidi Veera Raghava

Reddy sold the land to Padala Vanama Reddy on 24.01.2004 of

Ramavaram Village.

IX.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property plot to an extent of 5 in S.No.175/2. Sri Mallidi Veera Raghava Reddy sold the land to Medapati Ramalinga Reddy on 11.08.2003 of Ramavaram

Village.

X.The EC is relating to property in S.No.175/2 for the period from 01.05.1995 to 05.06.2013. As per this EC the property plot to an extent of Ac.1.53 cents in S.No.175/2. Sri Nallamilli Rama Reddy sold the land to Mallidi Veera Raghava Reddy on 30.01.2003 of

Ramavaram Village.

101.The sale deed which is xerox copy dated 30.01.2003 for an extent of Ac.1.53 cents in S.No.175/2 of Ramavaram Village purchased by Mallidi Veera Raghava Reddy S/o Subbireddy from Nallamilli

Ramareddy, S/o Satyanarayana Reddy.

102.The evidence of PW14 who worked as VRO, Mahindrawada,

Anaparthi Mandal and worked at Anaparthi from May 2008 to June 2009. He is responsible for maintenance of land revenue collections

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 78 and land records. He deposed that he did not issue Ex.P18 and does not bear his signature and it is fake document. By the time of Ex.P18 he was not working at Ramavaram and M.Venkateswara Rao and

K.Yesuratnam worked as VROs. Ramavaram village consists of wet lands only. Revenue department will collect land revenue for the said lands. The CBI has obtained his signature and handwriting under

Ex.P44. As per the evidence of PW39 and Ex.P179 CFSL report the person who wrote S25 to S30 (Ex.P44) did not write Q68 and Q69 (in

Ex.P18). It means Ex.P18 is a fake document submitted to Bank for loan.

103.The evidence of PW23 is the Typist in the office of PW4 Panel

Advocate for Andhra bank, Syndicate Bank and State Bank of India.

He deposed that he can identify the signatures of PW4. He typed

Ex.P15 and Ex.P19 legal opinions given by PW4. It contains the signatures of PW4. He deposed that Ex.P46 the EC application though stand in the name of PW4. The signatures on the said application does not belongs to PW4. The writings on the said applications does not belongs to PW4.

104.The said Ex.P46 marked through PW15 who is the junior

Assistant in the office of Sub Registrar, Rajanagaram. He deposed that he identified the signature of one Ramesh Babu (LW16). As per

Ex.P46 which is the letter addressed to CBI, Visakhapatnam by

V.Ramesh Babu (LW16). He handed over the attested copy of application applied by V.V.R.Subramanyam (PW4) on 03.01.2009 for issuance of Encumbrance Certificate.

105. PW23 evidence reveals that the signature on the EC application under Ex.P46 does not belongs to PW4 for the property in S.No.175/2 to an extent of Ac.1.53 cents. Surprisingly the prosecution did not

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 79 question the PW4 whether the signature on application of EC in Ex.P46 is belongs to him or not. PW23 is not competent person, when PW4 who is signatory is competent to say about his signatures. Hence, the evidence of PW23 is no way helpful to the case of the prosecution.

106. During cross examination, PW4 admitted that he obtained ECs to his legal opinions from SRO Office. This admission supports that he applied EC for Ac.1.53 cents in S.No.175 under Ex.P46. During investigation, the CBI received the attested copies of ECs and registered sale deed dated 30.01.2003 and 19.04.2007 from Sub

Registrar, Anaparthi under Ex.P48. As per Ex.P48, Mallidi Veera

Raghava Reddy who is father of A5 sold Ac.1.53 cents in Sy.No.175/2 to different persons from 2003 to 2008 during his life time. Mallidi

Veera Raghava Reddy died on 29.09.2009. But A5 did not inform the same to Bank officials. None of the accused cross examined about the

ECs which was enclosed in Ex.P48 about the sale of the Ac.1.53 cents in S.No.175/2 to different persons by father of A5 from 2003 to 2008.

Mallidi Veera Raghava Reddy has no right or title over the above property on the date of creation of mortgage with SBI, Anaparthi for the loan sanctioned to VNR Refineries Pvt. Ltd.

107. Item No.3 : The propertyto an extent of Ac.6.09 cents in

RS.No.69 and 57/2 of Pekeru Village.

The investigation discloses that Sri Mallidi Veera Raghava

Reddy father of A5 acquired this property vide document No.2559/1995 of SRO, Draksharama for consideration of Rs.3,83,670/-. He mortgaged the said property with a commercial Branch, SBI, Kakinada on 27.03.1997 and continued till 02.01.2009 for the credit limits of

Rs.350 lakhs sanctioned to M/s Balagam Reddy and others which is

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 80 still outstanding. He executed a gift deed dated 23.03.2007 by conveying the said property in favour of his wife Mallidi Bullemmai.

108. PW6 gave legal opinion under Ex.P25 on 30.05.2012. He is the panel Advocate of State Bank of India since 2005. He deposed that as per Ex.P25 the property to an extent of Ac.6.09 cents situated in

Pekeru Village in S.No.67 and 50/2 is mortgaged to State Bank of

India, Commercial Branch, Kakinada by father of A5. During the subsistence of said mortgage father of A5 transferred the said property in favour of one Mallidi Bullammai under a registered gift deed dated 23.03.2007, registered as document No.713/2007 in SRO,

Draksharama. The same property was again mortgaged to State Bank of India, Anaparthi Branch, during the subsistence of first mortgage created by father of A5.

109. PW10 Mallidi Bullemmai, wife of Veera Raghava Reddy and mother A5. She deposed that she do not know whether her husband did any transactions with the Bank. Her signature was marked as

Ex.P33 on letter of confirmation for creation of mortgage by deposit of title deeds by VNR Refineries Pvt Ltd., dated 30.03.2009 by depositing of title deeds to an extent of Ac.5.86 cents in RS.NO.67 and Ac.0.23 cents in RS.No.50/2 of Pekeru Village.

110. Ex.P34 is signature of PW10 at Pg.No.9 of letter of arrangement of the loan for sanction of credit facilities of M/s VNR Refineries Pvt.

Ltd., dated 24.12.2010.

111. Ex.P35 is the signature of PW10 on confirmation for extension of mortgage by deposit of title deeds covering enhanced given to Branch manager, State Bank of India, Anaparthi in respect of loan sanctioned to VNR Refineries Pvt. Ltd., in respect of properties document

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No.713/2007 dated 23.03.2007 and 2559/1995 dated 16.10.1995. The properties situated in RS.No.67 to an extent of Ac.6.86 cents and

Ac.0.23 cents in RS.No.50/2.

Ex.P36 is the signature of PW10 on supplemental agreement of loan cum hypothecation executed on 25.02.2010 to State Bank of

India, Anaparthi in respect of VNR Refineries Pvt. Ltd., Vemulapalli for loan cum hypothecation for Rs.400 lakhs.

Ex.P37 is the specimen signatures of PW10.

Ex.P38 is the sale deed dated 23.03.2007 executed by Mallidi

Veera Raghava Reddy S/o Subbireddy in favour of his wife

Bullemmai/PW10 in respect of property to an extent of Ac.5.86 cents in

S.No.67 and Ac.0.23 cents in S.No.50/2 of Pekeru village.

112. The evidence of PW26 reveals that Ex.P116 is true extract of registered settlement deed dated 23.03.2007 which is already marked as Ex.P38. Both the documents were executed by Mallidi Veera

Raghava Reddy, it contains the signatures and photograph of Veera

Raghava Reddy and claimant besides their thumb impressions. The property covered under Ex.P116 settlement deed is situated at Pekeru

Village in S.No.67 to an extent of Ac.5.86 cents and in S.No.50/2 is an extent of Ac.0.23 cents in total Ac.9.09 cents. One Gunna

Satyanarayana was Sub Registrar at the time of execution of Ex.P116 which is true extract of registered settlement deed. As per Ex.P117 and evidence of PW30 Mallidi Veera Raghava Reddy, S/o Subbireddy of

Ramavaram village died on 29.09.2009.

113. PW5 stated that Mortgaged the agricultural land to an extent of

Ac.06.09 cents in RS.No.67 and 50/2 of Pekeru village relating to

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Mallidi Veera Raghava Reddy vide document No.2559/1995 which was deposited by the bank on 27.03.1997 (Ex.P23 sale deed).

114. Ex.P21 is the letter dated 25.04.2013 marked through PW5 addressed by the Chief Manager, SBI, Kakinada to Inspector of Police,

Visakhapatnam by giving some information belongs to the loan sanctioned to Balagam Reddy and others and Parvathi Parameswara

Rice Mill. Under the said documents, an equitable mortgage over the property is created in favour of State Bank of India, Anaparthi Branch and SME Branch, Kakinada. On 27.03.1997 the 1st document property was mortgaged in favour of the Bank. As per Ex.P21, M/s

Balagam Reddy and others obtained loan by depositing the document to an extent of 338 Sq. Yards of site along with building D.No.1-112/A at Ramavaram Village and agriculture land belongs to Mallidi Veera

Raghava Reddy to an extent of Ac.06.09 cents in RS.No.67 and 50/2 of Pekeru Village. As per this document, M/s Balagam Reddy and others obtained loan cash credit of Rs.350 lakhs and term loan

Rs.22.50 lakhs, SME credit plus Rs.25 lakhs and the same is continued till 02.01.2009. As per enclosures of Ex.P21 i.e., Ex.P22 executed a sale deed on 06.05.1996 in favour of Bullemmai sold the property to an extent of Ac.5.86 cents in RS.No.67 and Ac.0.23 cents in RS.No.50/2.

115. Ex.P23 is a sale deed executed by Veera Venkata Satya

Ramakrishna Prabhakar Chowdary and his son in favour of Mallidi

Veera Raghava Reddy on 16.10.1995 in respect of property to an extent of Ac.0.23 cents in S.No.50/2, Ac.5.86 cents in S.No.67.

116.As per the evidence of PW5, A5 is the Managing partner of M/s

Balagam Reddy and others. A cash credit limit of Rs.3.50 crores and

SME Credit Plus loan of Rs.25 lakhs were sanctioned to M/s Balagam

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 83

Reddy and others. On 27.03.1997, 1st it was sanctioned at Anaparthi

Branch. The last enhancement was made in the year 2009. The borrowers have extended mortgages from time to time. From 23.05.1998 to 02.01.2009, it was enhanced, further security was also extended. On 23.12.2011 it was sanctioned. In the year 2011 in his presence an equitable mortgage was created.

117. As per PW6 evidence and Ex.P25 the above property was mortgaged to State Bank of India, Commercial Branch, Kakinada by father of A5 and during the subsistence of the said mortgage, he transferred the said property in favour of his wife Bullemmai under gift deed dated 23.03.2007. During the subsistence of said mortgage with

Commercial Branch, Kakinada to M/s Balagam Reddy and others, A5 given the above property as collateral security for the present loan to the SBI, Anaparthi Branch for M/s VNR Refineries Pvt Ltd.

118. Item No.4 :

The evidence of PW17 reveals that his father and father of A5 are brothers. A5 is the MD of A6 and he is one of the Directors of A6.

He did not invest any amount in A6. Sunitha is his wife. They offered

Ac.3-11 1/2 cents of land belongs to his wife as security for A5 in SBI

Anaparthi for a period of one year at the request of A5. In that connection nothing was paid to him. After one year when he requested to release the property A5 replied that it will take time since the property is in Bank. He never attended the board meetings of A6.

Ex.P30 Board meetings dated 30.12.2008 and 22.12.2008 does not contain his signatures. He can identify the signature of his wife.

Ex.P30 was marked through PW9 who is Chief Manager, State Bank of

India, CPC Visakhapatnam stating that A6 company addressed a letter

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 84

dated 20.01.2010 to State Bank of India, Anaparthi by enclosing board

resolution. Through this witness some documents are marked.

Ex.P50 is the Agreement of loan cum hypothecation.

Ex.P51 is the letter of confirmation for creation of mortgage by deposit of title deeds.

Ex.P52 is guarantee agreement.

Ex.P53 is the letter of confirmation for extension of mortgage by deposit of title deeds (LD.No.41).

Ex.P54 is the letter of confirmation for extension of mortgage by deposit of title deeds (LD.No.42).

Ex.P55 is the letter of confirmation for extension of mortgage by deposit of title deeds (LD.No.50).

Ex.P56 is guarantee agreement (LD.No.55).

Ex.P57is the supplemental agreement of loan cum hypothecation (LD.No.56).

Ex.P58 is the letter of confirmation for extension of mortgage by deposit of title deeds (LD.No.33).

Ex.P59 is the letter of confirmation for extension of mortgage by deposit of title deeds (LD.No.40).

119.He deposed that the signatures on Ex.P58 and Ex.P59 which are letter of confirmation for extension of mortgage by deposit of title deeds do not belongs to his wife and himself. He stated that Ex.P52, Ex.P56 and Ex.P57 contains the signatures of his wife and himself. Ex.P51,

Ex.P54 and Ex.P55 contains the signature of his wife. Ex.P53 contains the signature of himself. Ex.P31, Ex.P34 and Ex.P36 contain signature

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 85 of himself and his wife which are letter of arrangement dated 25.02.2010 which is marked through PW9 and letter of confirmation for extension of mortgage by deposit of title deeds and letter of arrangement. He further deposed that they subscribed their signatures on documents at SBI Anaparthi branch one Venue who working in A6 company came to their house and obtained their signatures on papers for extension of loan period. Though they asked many times to return their property documents, A5 did not return by saying that the documents are in bank. By saying so, he obtained their signatures on some other papers. He further deposed that the building of his father at Ramavaram and landed property to an extent of Ac.1.00 at Lolla village of his mother were given as security for M/s Balagam Reddy and others in Commercial branch, Kakinada. The said loan was not discharged. The house of his father was sold in bank auction. He do not know who is Karri Chandra Sekhara Reddy. He sustained heavy loss and A5 cheated them. The specimen signatures of this witness and his wife are Ex.P60 and Ex.P61. As per the evidence of Scientific

Expert PW39 he deposed that the person who wrote Ex.P60 (specimen signatures), Ex.P50 (Agreement of loan cum hypothecation), Ex.P53 (letter of confirmation for extension of mortgage by deposit of title deeds) also wrote Q17 which is Ex.P58 the letter of confirmation for extension of mortgage by deposit of title deeds. Actually PW17 denied the signature on Ex.P58. As per the evidence of PW39 the person who wrote Ex.P61, Ex.P51 (letter of confirmation for extension of mortgage by deposit of title deeds), Ex.P54 and Ex.P55 (letter of confirmation for extension of mortgage by deposit of title deeds) also wrote Q31 (Ex.P59). But PW17 denied the signature on Ex.P58 and Ex.P59. As per this evidence, PW17 and his wife signed on Ex.P58 and Ex.P59.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 86

120. Item No.5 :

The property to an extent of 436 Sq. yards site along with building D.No.9-75 at Anaparthi vide document No.2049/2008 relating to Tetali Srinivasa Reddy, which was deposited with the bank on 28.12.2011 in respect of above loan. PW5 who is Customer Support

Officer, State Bank of India, Small and Medium Enterprises handover

Ex.P21 to Ex.P24 to Inspector of Police, CBI stated that the above property was deposited with the Bank on 28.12.2011 in respect of loan taken by M/s Parvathi Parameswara Rice mill, Duppalapudi for term loan of Rs.270 lakhs and cash credit Rs.150 lakhs sanctioned on 01.06.2011.

121. Ex.P24 is the photocopy of small scale industries/small business finance extract of Mallidi Veera Raghava Reddy, the proprietor / partners of M/s Balagam Reddy and others.

122. As per the evidence of PW5, Ex.P24 belongs to loan sanctioned to M/s Balagam Reddy and others and Parvathi

Parameswara Rice mill. Under the said documents, an equitable mortgage over the property to an extent of 436 Sq. Yards of site along with D.No.9-75 of Anaparthi is created in favour of State Bank of India,

Anaparthi branch and SME Branch, Kakinada.

123.On 28.12.2011 the third document property (436 sq. Yards) was mortgaged in favour of the bank. He further stated that they stopped the disbursement of the loan after coming to know about the fraud committed by the Parvathi Parameswara Rice mill. They disbursed the loan up to Rs.80 lakhs only.

124.In the year 2011 in his presence an equitable mortgage over the property of Tetali Srinivasa Reddy was created for house property of

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 87 430 Sq. Yards of site situated at Anaparthi village covered under 2049/2008 of SR Office Anaparthi. The original documents are in the custody of SME branch, Kakinada. As per the evidence in the year 2011 this property was mortgaged with SME Branch Kakinada by Tetali

Srinivasa Reddy for the loan taken for M/s Parvathi Parameswara Rice mill. All the documents are with the SME Branch Kakinada. Again they mortgaged the same property for the loan taken by M/s VNR

Refineries Pvt Ltd/ A6.

125. Item No.8 :

PW4 gave a legal opinion under Ex.P9 relates to 338 Sq.

Yards of property in Ramavaram village of Anaparthi Mandal and he verified Ex.P10 registered settlement deed dated 19.04.2007 and

Ex.P11 registered sale deed dated 06.05.1996.

126.During cross examination, he stated that they conducted search over the property in the SR Office concerned and enclosed the receipt of the same along with opinion. They need not verify the genuineness of pattadar passbooks, title deeds and tax receipts, 1-B register at

MRO Office. He specifically mentioned in opinion with regard to who has to create an equitable mortgage in favour of the Bank. He obtained Encumbrance Certificates relating to his legal opinions from

SR Office.

127. The evidence of PW1 reveals that he verified the housing loan of M.V.Narayana Reddy/A5 for the purpose of construction of house bearing D.No.1-112 of Ramavaram village to an extent of 338 Sq.

Yards of site. This loan was recommended by N.V.Ramana Rao/A3 the then Branch Manager of Anaparthi branch. It was sanctioned by Dy.

Manager, Visakhapatnam. For the purpose of this loan, the borrowers

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 88 registered a gift deed executed by M.Bullemmai in favour of

M.V.Narayana Reddy/A5. The link document bearing No.462/1996 was mortgaged with Commercial Bank, Kakinada as security to M/s

Balagam Reddy and others. He further deposed that one

V.V.R.Subramanyam Advocate gave a legal opinion and he stipulated to obtain original document No.462/1996 but the stipulation was not complied by N.V.Ramana Rao/A3 and Pramod Kumar. Thereby he obtained legal opinion from Pepakayala Ramakrishna who opined that the mortgage was not enforceable till the mortgage with Commercial

Bank, SBI, Kakinada is discharged.

128.As per the investigation report, even after knowing the above facts, M.V.Narayana Reddy/A5 arranged same property as collateral security for the present loan sanctioned by State Bank of India,

Anaparthi in the name of M/s VNR Refineries Pvt Ltd. A3 and A4 did not insist for original link documents at the time of accepting the property.

129. PW5 who is customer support officer, State bank of India small and medium enterprises branch handed over Ex.P22 to Ex.P24 under letter dated 25.04.2013 under Ex.P21.

130. Ex.P21 is the true copy of letter dated 25.04.2013 addressed by

Chief Manager, State Bank of India, Kakinada to Inspector of Police,

CBI in respect of loan taken by M/s Balagam Reddy and others for cash credit limit Rs.350 lakhs and term loan Rs.22.50 lakhs SME

Credit Plus Rs.20 lakhs and mortgaged the property to an extent of 338

Sq.Yards of site at Ramavaram village vide document No.462/1996 of

Mallidi Bullemmai, deposited with the bank on 27.03.1997 (the sale deed Ex.P22) for the loans sanctioned to M/s Balagam Reddy and others and an equitable mortgage over the property is created in favour

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 89 of State Bank of India, Anaparthi branch and SME Branch, Kakinada.

A5 is managing partner of M/s Balagam Reddy and others and a cash credit limit of Rs.3.50 Crores and SME credit plus loan of Rs.25 lakhs was sanctioned to Balagam Reddy and others. On 27.03.1997 1st time it was sanctioned at Anaparthi branch. Last enhancement was made in the year 2009. The borrowers have extended the mortgages from time to time. The security also extended.

131. The evidence of investigating officer examined as PW41 reveals that the originals of Ex.P22 to Ex.P24 are filed in his housing loan case vide CC.36/2024, filed against A3 herein and one Pramod

Kumar against Mallidi Venkata Narayana Reddy/A5 herein for taking housing loan of Rs.20 lakhs on 25.03.2008 for construction of RCC building in a plot admeasuring 338 Sq. Yards at Ramavaram village of

Anaparthi Mandal by depositing of the gift deed executed by Bullemmai in favour of A5 herein on 19.04.2007.

132.The prosecution case further reveals that during the subsistence of mortgage of the same property to State Bank of India, Commercial branch, Kakinada by Bullemmai, who is the mother of A5 herein, she executed gift deed in favour of A5 on 19.04.2007.

133.The prosecution case reveals that A5 who is the managing partner of VNR Refineries/A6 approached the Anaparthi branch on 30.12.2008 under Ex.P30 for term loan of Rs.3.50 Crores and cash credit limit of Rs.3 crores. The same proposal was forwarded by A3 and one Pramod Kumar, who are the Accused in CC.36/2024 by knowing about the loan sanctioned for housing loan of Rs.20 lakhs on 25.03.2008 for construction of RCC building in a plot admeasuring 338

Sq. Yards at Ramavaram Village of Anaparthi Mandal.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 90

134. As per Ex.P1 which was marked through PW32 in Page

No.12 the value of the collateral security of land and buildings are

Rs.3.50 crores valued on 19.12.2008. The personal guarantee of all the partners and guarantors who offered their personal properties as collateral security as total worth of Rs.5.93 Crores network Rs.234.35 lakhs as on 30.12.2008.

135. As per the evidence of PW41 during cross examination by A3 deposed that "It is true two charge sheets are filed in connection with RC 09(A)/2012 which is numbered as CC No.32/2014 and CC.No.36/2014. The present case is CC.No.32/2014. A3 herein is shown as A1 in

CC.No.36/2014. One Pramod Kumar, Asst. Manager

(Advances) was shown as A2 and M.V.Narayana

Reddy (A5 herein) is shown as A3 in CC.36/2014.

It is true CC.No.36/2014 pertains to housing loan availed by A5 herein M.V.Narayana Reddy. An extent of 338 Sq. Yards is subject matter in that case.

It is true a house was constructed in that site and the same property is shown in the present case (CC 32/2014) as collateral security. The borrower A5

M.V.Narayana Reddy paid installments till registering of FIR in this case. It is true the value of mortgage property increases after constructing a house."

136.During the subsistence of the mortgage of the property, the State bank of India, Commercial branch, Kakinada, the mother of A5 transferred the property to an extent of 338 Sq. Yards in favour of A5

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 91 under gift deed and subsequently, A5 obtained a loan from State Bank of India, Anaparthi branch for construction of the building in 338 Sq.

Yards of property. In the said site, he constructed a building vide

D.No.1-112 of Ramavaram village and given collateral security to the loan taken by VNR Refineries Pvt Ltd/ A6.

137. 2nd sanction :The investigation discloses that A5 Managing

Director of VNR Refineries Pvt Ltd., presented a letter dated

28.08.2009, requested for enhancement of cash credit from Rs.1.5

Crores to Rs.3 Crores as the sanction limit was not sufficient to

maintain the minimum stock. The request was forwarded by

M.Ramesh babu, the then Branch manager, SBI Anaparthi vide

letter dated 24.09.2009 to CPC, Visakhapatnam. Later NWCC-II

LHO Hyderabad sanctioned term loan of Rs.80 lakhs by way of

reimbursement, SLC limit of Rs.20.00 lakhs and LC limit of Rs.2.00

Crores continuation of Cash Credit limit at Rs.1.50 Crores on

19.02.2010. SBI, Anaparthi Branch extended the equitable

mortgage of the above referred properties towards collateral

security of the loan.

138. 3rd sanction :Again A5 who is Managing Director of M/s

VNR Refineries Pvt Ltd.,/ A6 addressed a letter to the Branch

Manager SBI Anaparthi on 26.10.2010 for enhancement of cash

credit limit from Rs.1.50 Crores to Rs.4.50 Crores to meet working

capital requirements on account of increase in turn over. He

wrote another letter on 03.12.2010 informing that they had

proposal to enhance paid up capital from Rs.2 Crores to Rs.5

Crores during the financial year 2010-2011 and infuse Rs.1.70

Crores as capital / Unsecured loan. A4 and A2 submitted pre

sanction inspection report. NWCC-II LHO Hyderabad sanctioned

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 92

the loan on following limits on 21.12.2010 i.e., enhancement of CC

limit from Rs.1.50 Crores to Rs.4.50 Crores. Renewal of SLC limit

of Rs.20 lakhs at existing level. Renewal of LC limit of Rs.2.00

Crores at existing level, with an observation to obtain additional

collateral security of Rs.0.50 crores.

139.Accordingly, the Anaparthi Branch, State Bank of India obtained

additional collateral security of Ac.7.20 cents of agricultural land in

RS.173 of Anaparthi belongs to Karri Chandra Sekhara Reddy.

140.The legal opinion under Ex.P19 given by PW4 in respect of above property stating that Karri Chandra Sekhara Reddy S/o China

Venkata Reddy having clear title to an extent of Ac.7.20 cents out of

Ac.13.64 cents in RS.No.173 of Anaparthi Village and the title deed is genuine and there are no encumbrances in respect of the said property.

141.A perusal of Ex.P20 registered settlement deed (which was marked through PW4 who is a Panel Advocate) executed by Nallamill

Venkanna and his sons namely Subbireddy, Papireddy and Venkata

Narayana Reddy in favour of Karri Chandra Sekhara Reddy, S/o Karri

China Venkata Reddy in respect of property to an extent of Ac.7.20 cents agricultural land out of Ac.13.64 cents in S.No.173 of Anaparthi.

A perusal of Ex.P20 it clearly visible about the correction of extinct in figure 7 in Page No.3 and words seven (with blue ink) in Page No.4.

142. PW13 deposed in the evidence that he worked as Junior

Assistant in the office of Sub Registrar, Bikkavolu. He handover

Ex.P42 registration extract of settlement deed vide document

No.124/1950 dated 20.10.1949 executed by Nallamilli Venkanna and others in favour of Karri Chandra Sekhara Reddy S/o China Venkata

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 93

Reddy for an extent of Ac.1.20 cents out of Ac.03.64 cents in S.No.173 of Anaparthi village.

143.The original of Ex.P42 is marked as Ex.P20. PW13 deposed that Ex.P20 contains an extent of Ac.7.20 cents in S.No.173 of

Anaparthi village. The original extent is Ac.3.64 cents. The extent is changed as Ac.13.64 cents. As per their records, the land conveyed is

Ac.1.20 cents but the land conveyed under Ex.P20 is Ac.7.20 cents.

Ex.P20 discloses different of inks with regard to change of extent. The change is with regard to the digit 1 (one) is converted as 7 (seven). As per the records under Ex.P42 actual extent mentioned in words is One

Acre Twenty cents, but one acre is changed in 7 in Ex.P20. After registration of the document, extent cannot be changed. For changing of extent, a rectification document should be obtained if the original document is changed. It amounts to forgery.

144.As per the evidence of PW13, Ex.P20 settlement deed dated 20.10.1949 document was forged and it is not genuine document which is corroborated the contents of Ex.P20 for changing of extent. The registration extract of Ex.P20 which is marked as Ex.P42 issued by

PW13 clearly established that Ex.P20 was forged and submitted to the

State Bankof India, Anaparthi for collateral security.

145.The VRO, Anaparthi examined as PW25 deposed that the land revenue record relating to S.No.173 of Anaparthi village including MRO report and RI report and his report which is marked as Ex.P115, as per this document Karri Chandra Sekhara Reddy has no land in S.No.173.

No pattadar passbook was issued in his favour. Ex.P115 contains the names of owners of the lands in S.No.173 namely Goluguri Aruna, Tadi

Chandra Reddy, Tadi Venkata Reddy, Tetali Srilakshmi, Tadi Lakshmi.

As per this document, they are the owners of the property to an extent

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 94 of Ac.3.64 cents in above survey number. As per this document, Karri

Chandra Sekhara Reddy has no land in S.No.173. He also further deposed that since 1994 to 1995 they have been issuing pattadar passbooks, they are not issued pattadar passbook which was enclosed in Ex.P45 in favour of K.Chandra Sekhara Reddy.

Ex.P43 which is Encumbrance Certificate in respect of extent

Ac.1.20 cents in S.No.173 of Anaparthi village obtained on 25.04.2013 for the period from 01.01.1985 to 30.04.1995.

146. PW15 who is a Junior Assistant in the office of Sub Registrar

Rajanagaram and worked at Anaparthi Sub Registrar Office. The

Inspector of Police, CBI seized the documents and EC 1740 dated 22.12.2010 from Manager, PBD SBI, Main Branch, Bhimavaram on 26.10.2013 in the presence of K.V.Satyanarayana Murthy. He deposed that he prepared the EC1740. It pertains to the land in

S.No.173 to an extent of Ac.07.20 cents. The entry discloses NIL.

One V.V.R.Subramanyam applied for it. He further deposed that in the year 1995 Anaparthi SRO was established. Previously Anaparthi

Village fell under Bilkkavolu SR jurisdiction. Ex.P20 was registered in

SRO, Bikkavolu. Original document of Ex.P20 contains Ac.1.20 cents.

It appears from Ex.P20 that it was changed as Ac.7.20 cents with blue ink page No.3 of said document contains Ac.3.24 cents with black ink.

But it appears to be changed as Ac.13.64 cents. Similarly Ac.1.20 cents at Page No.3 in Schedule of property appears to be changed as

Ac.7.20 cents. At Page No.4 the letters Ac.1.20 cents is altered as

Ac.7.20 cents. Exact extent of land will be mentioned in basic register.

He did not verify basic register at the time of issue of EC. To get a correct EC they have to obtain it from SRO, Bikkavolu since the document was registered at SRO, Bikkavolu. He further deposed that

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 95 he know one Ramesh babu (LW16) who worked along with him and he can identify the signatures. Through the witness Ex.P46. He handover the documents under seizure memo dated 26.10.2013 under Ex.P45.

As per Ex.P45, he handover the following documents :

1.Photocopy of chitta issued by the Mandal Revenue Officer,

Anaparthi on 21.02.1989 in respect of Ac.7.20 cents of land in

S.No.173, Anaparthi in the name of Sri Karri Chandra Sekhara Reddy (1 sheet).

2.Photocopy of land tax receipt no.0112000, dated 14.07.2009 for Rs.3,300/- issued by the VRO, Anaparthi in respect of

Ac.7.20 cents of land in Sy.No.173, Anaparthi (1 sheet).

147. PW25 deposed in the evidence that the land receipt dated 14.07.2009 which was seized by CBI from SBI Branch, Bhimavaram under seizure memo dated 26.10.2013 under Ex.P45, it shows that it was issued for an extent of Ac.7.20 cents in S.No.173 of Anaparthi village in favour of K.Chandra Sekhara Reddy. The receipt issued by one P.Subbarao. PW25 deposed that in fact by the date 14.07.2009

T.Subbarao was retired from service. Ex.P114 is a letter addressed by him to CBI dated 18.12.2013 along with copies of proceedings of

District Collector which clearly reveals that T.Subbarao was retired from service on 30.06.2009. But as per the receipt dated 14.07.2009 which enclosed along with PW45 contains the signature of T.Subbarao.

PW25 further stated that on enquiry T.Subbarao stated that the signature on land receipt does not contain his signature. So, it clearly shows that the receipt dated 14.07.2009 is fake document.

148. Ex.P47 is the letter of Sub Registrar by name V.Ramesh babu (LW16) Anaparthi to Inspector of Police, CBI, Visakhapatnam by

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 96 showing the attested copy of application submitted by VVR

Subramanyam, Anaparthi on 22.12.2010 for issuance of EC No.1740 prepared by K.Jogananda Rao, Sub Registrar, V.Siva Prasad, Junior

Assistant, Sub Registrar office, Rajanagaram and Smt.Bhaskaram

Junior Assistant of Sub Registrar office, Atreyapuram prepared on 22.12.2010 in respect of property in S.No.173 to an extent of Ac.7.20 cents relating to Karri Chandrasekhara Reddy vide document

No.124/1949.

149. The evidence of PW16 who is VRO, Pandalapaka from 2010 to 2015 deposed that no person in the name of Karri Chandra Sekhara

Reddy S/o China Venkata Reddy at Pandalapaka village as per village records. Though there are families in the surname of Karri but no person in the of Karri Chandra Sekhara Reddy. In this connection, he asked K.Gopalakrishna Reddy Ex- Surpanch of village, he stated that no person in the name of Karri Chandra Sekhara Reddy in the said village. Through this witness, Ex.P49 photocopy of SSL No.4 of SBI

Anaparthi Branch marked with subject to objection. He deposed that the person who appears from the photograph affixed on original of

Ex.P49 does not belongs to Pandalapaka village. He has no occasion to see the said person at Pandalapaka village.

150.During cross examination, he deposed that he has not seen the original of Ex.P49 and also original photograph affixed on the original of Ex.P49. It does not contain the name of father of said person and no mention that it belongs to Pandalapaka village. Ex.P49 is photocopy which was seized from PW32 / Asst. General Manager,

SME centre, Visakhapatnam by PW41 who is the investigation officer during investigation from the loan file. Even though it is a photocopy but it was admissible, because the same was secured by Investigation

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 97 officer from the loan file of the present case which is available at SME

Centre, Visakhapatnam.

151. PW28 who is resident of Anaparthi deposed in the evidence that Varalakshmi is his wife and daughter of Nallamilli Venkata Reddy.

Their marriage was solemnized in the year 1973. One Nallamilli

Syamasundara Reddy, peda Venkata Reddy and China Venkata

Reddy who are the brothers of his wife gifted Ac.0.74 cents of land in

S.No.173 to his wife. By that time his father-in-law died. In the year 1995 on the eve of marriage of his daughter, his wife gifted the above land to their daughter G.Aruna /PW27. He do not know who is the person appears on the photograph on Ex.P49. In their relatives no person in the name of Karri Chandra Sekhara Reddy and he has no occasion to see the person appears from photograph affixed in Ex.P49.

152.The evidence of PW27 reveals that in the year 1995 her marriage was performed with Goluguri Sathireddy. Karri Varalakshmi and Karri Subbareddy /PW28 are her parents. Ac.0.74 cents in

S.No.173 Anaparthi village was given to her by her parents towards stridhana, having Kata No./patta No.143. Her mother got the said property from her father Nallamilli Venkata Reddy. Venkata Reddy had three brothers viz., Subbareddy, Papireddy and Veerareddy. Nallamilli

Venkanna was their father. He never saw the person who photographed appeared in Ex.P49. She has no acquaintance or knowledge over him.

153. PW27 and PW28 deposed in their cross examination that they cannot say the total extent of the land covered under S.No.173.

154. The evidence of PW29 who is resident of Anaparthi reveals that himself Venkata Reddy, Ramareddy are brothers. Their father

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 98 purchased Ac.0.80 cents land from one Seshayamma. In total their father owned Ac.2.40 cents of land. The said land was partitioned amongst their three brothers. He do not remember the survey number of the said land. He also purchased share of land of his brother by name Ramareddy. His elder daughter-in-law Lakshmi Kala purchased the share of land of Venkata Reddy. He do not know about the person who appears from Ex.P49 photograph and he had no occasion to see

Karri Chandra Sekhara Reddy and he has no knowledge about him.

155. As per the evidence of PW25, PW15, PW16, Ex.P20 that the borrowers submitted the forged document for additional security for the loan taken by VNR Refineries Pvt. Ltd.

156. POINT NO.3 and 4 :

The charge U/Sec.120-B of IPC framed against all Accused

A1 to A7 that in pursuance of the conspiracy with each other

caused loss to the bank and wrongful gain ourselves and cheated

the bank.

The charge U/Sec.420 of IPC framed against all Accused A1

to A7 that as A1 to A4 and A7 dishonestly induced the bank

sanctioned loans and dishonestly disbursed the loans basing on

fabricated documents submitted by A4 and A6.

The brief averments of Sec.420 of IPC, cheating and dishonestly inducing delivery of the property.

“Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person or to make or destroy the whole or any part of valuable security, or anything which is signed or sealed, and which

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 99 is capable of being converted into a valuable security, shall be punishable with imprisonment of either description for a term which may extend to 7 years and shall also be liable to fine.”

The necessary ingredients to attract the offence U/Sec.420 IPC are as follows :

(i)Element of cheating ;

(ii) dishonest inducement to deliver property;

(iii)Menseria of the Accused by the time of making inducement.

The prime component of Sec.420 IPC is cheating was defined as

U/Sec.415 of IPC 415 of IPC - cheating.

"Whoever by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body mind, reputation her property is said to cheat."

Explanation :- a dishonest concealment of a facts is a deception within the meaning of this section.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 100

The criminal conspiracy defined U/Sec.120-A IPC and punishable U/Sec.120-B, occurs one or two more persons agreed to do an illegal act or to legal act by illegal means. The agreement itself is a core of offence.

Agreement means there must be a meeting of minds between two or more people.

Illegal act means the agreement must relate to committing an illegal act, or a legal act achieved through unlawful means.

If the agreement is to commit an offence, the conspiracy is punishable. If it is to do a legal act through illegal means, an overt act is required for conviction. The mensrea in the criminal conspiracy is the defendants in the combination must intend to commit the object of offence, they must understand that committing the crime is a consequence of their agreement, lastly they must desire that particular offence as outcome of their agreement.

157.The case of the prosecution is that A1 to A7 deceived the State

Bank of India with dishonest and fraudulent intention and thereby caused wrongful loss to State Bank of India and wrongful gain to borrowers.

The judgment of the Hon'ble Supreme court in Firozuddin

Basheeruddin and others Vs. State of Kerala "it is not necessary that each of them must have actively participated in the commission of the offence or was involved in it from start to finish. What is important is that they were involved in the conspiracy."

158.The prosecution case is that A3 accepted the unsigned board resolution and allowed the documentation. He did not insist about the liabilities of borrowers and guarantors. A3 and A4 failed to create

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 101 memorandum for recording extension of EM (SME-7) and letter of confirmation for extension of mortgage (SME-8) relating to Plot measuring 338 Sq. Yards in S.No.254/3 which was already mortgaged for housing loan. A3 and A4 did not conduct inspection of the properties which was submitted towards collateral security.

159. PW1 deposed in evidence the procedure for sanctioning of term loan is the party has to submit an application for term loan to part finance with a project cost. He has to submit project report along with other documents. Then the branch has to verify the antecedents of the borrower. The collateral securities and other properties offered for mortgage will be verified. The branch has to obtain opinion with regard to said properties and valuation report. After that the branch has to forward the same to CPC, Visakhapatnam along with other papers.

The Manager CPC will conduct pre sanction inspection of the project.

He has to obtain assets and liabilities statements of borrowers and also obtain assets and liabilities statements of sister concerned. After following the said procedure, the Manager will appraise the Chief

Manager and then Chief Manager will recommend the proposal to

Network Credit Committee, Visakhapatnam. The committee forwards a recommendation to Chief Manager along with decision. Then the Chief

Manager will forward the same to Branch Manager for strict compliance. Then the Branch will obtain loan documents SMEs-I to VI from borrowers. After executing the loan documents by borrowers, the details will be entered in a document execution registers by the Branch

Manager, the register will be signed by Branch manager and Field

Officer. The branch will obtain an equitable mortgage with regard to the documents described in the legal opinion. The details will be entered in equitable mortgage register and signed by the branch

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 102

Manager and Field officer. The responsibility of obtaining original title deeds and creation of equitable mortgage is that of Branch Officer and

Field Officer. After following the said procedure, the amount will be disbursed directly to the supplier who supply the machinery. If it is not possible to pay the amount to supplier, then the amount will be paid to borrower against production of necessary bills. The Field Officer has to conduct periodical inspection.

160.The procedure for term loan is equally applicable to cash credit loan. The account will be opened in CBS (Core Banking System) and the disbursement will be made directly to the supplier of raw material.

The Bank will obtain bills from the borrower.

161.The procedure for letter of credit facility is for supplying of raw material to ensure payment on due date. In this loan, the borrower will approach the bank with LC application cum indemnity bond and purchase order and terms of credit. Then the bank will issue letter of credit on banks standards stationery. The letter of credit facility will be issued to beneficiary bank directly. Then the beneficiary bank will advise the supplier about the establishment of letter of credit and its terms. If the terms are acceptable to the supplier he will supply the material to LC applicant. After receiving the bill from beneficiary bank, the bank will honour the bills and recover the amount from cash credit loan facility or from current account of borrower. The duty of Field

Officer is to prepare a note detailing about the terms of the loan, terms of credit and nature of material, availability of limit to the unit, margin money and the recovery of commission. Basing on terms and conditions of sanction, the Branch Manager has to approve the note.

162.In this case a term loan of Rs.250 lakhs and cash credit limit of

Rs.150 lakhs were sanctioned to VNR Refineries Pvt Ltd/A6 by NCC-II,

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 103

Visakhapatnam on 14.03.2009 under Ex.P1. As per the evidence of

PW1, the sanction order was prepared by A.Vidya Sagar and

V.Nageswara Rao by conducting pre sanction survey over the properties.

163. PW11/A.Vidya Sagar, Manager cum Credit Analyst, CPC,

State Bank of India, Visakhapatnam who prepared the sanction order deposed in the cross examination as follows :

" I have gone through the file. I processed the file.

All the xerox copies of documents, collateral security

documents, legal opinion, report of valuation and pre

sanction inspectional report will be forwarded to us

for our process of file. If we find any defect, we can

either return the entire file to branch or to call for any

necessary document. We did not find any defect in

the file at the time of processing. " "NCC-II also after satisfying with the

documents of loan file only will sanction the loan.

The legal opinion and valuation report xerox copies

would contain the particulars of documents submitted

by borrower and coobligate i.e., whether originals or

photostat copies are submitted for legal opinion. The

existing loan can be enhanced by taking further

collateral security and it can also be enhanced if the

existing security is sufficient to enhance the loan

limit. At the time of enhancing of loan limit, the entire

process with regard to pre sanction inspection and

other requirements should be followed. If any defect

is found with regard to documentation of previous

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 104

loan, at the time of enhancement of loan limit, no

enhancement will be made. If the borrower came

forward to offer any other property for security, in

such a case, we agree to enhance the loan limit in

spite of previous defect, but it should be rectified.

The question of non-disbursement of loan amount,

one sanctioned does not arise. In case of any defect

with regard to sanctioning of previous loan, the

enhancement of loan limit will not be made. "

164. As per Ex.P1 in Page No.25, the primary security for cash credit and term loan are the hypothecation of current assets of the company, hypothecation of machinery and other fixed assets for collateral security is equitable mortgage of properties belonging to directors and guarantors worth of Rs.3.50 Crores. The personal guarantees assessed by branch on 22.12.2008 is 234.35 Net worth on 30.12.2008 as per the opinion report.

165. During cross examination, PW1 deposed as follows :

" After reaching the file to CPC, Visakhapatnam, it was processed by A.Vidya Sagar and V.Nageswara Rao officers of CPC by preparing a process note. In the present case also, after scrutiny made by said officers, it was placed in committee and then only the loan was sanctioned. At the time of preparing the process note, if any document is required, they called for the same from Branch Manager. If all the above documents are in perfect condition, then only the committee will sanction the loan."

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 105 " He further deposed that in the year March 2009, the loan was sanctioned. In between 2009 and 2012, internal audit and inspections were taken place. After audit and inspection, reports will be submitted by them to Branch office, corporate office and Head office. I have gone through the said reports.

I do not remember whether the said audit and inspection report do not contain any adverse remarks with regard to 1st time sanctioning of loan recommended by A3." " Profile particulars of sister concerned of A6 mentioned at

Page No.5 of Ex.P1 were prepared at CPC, Visakhapatnam.

The CPC can get information directly from Branch or from any where as they like. In case of nonreceipt of pre sanction inspection report for collateral security and other necessary documents the CPC would not process the note and ask for necessary information from branch concerned. As per Page

No.25 of Ex.P1 opinion reports are complied on 30.12.2008.

A3 disbursed only part of the sanction loan amount. The case file contains CA reports given by V.V.Satyanarayana,

Chartered Accountant, Rajahmundry. "

166. As per Ex.P40, the registrar of companies accepted the resolution dated 02.05.2009 authorized the managing director to sign and submit forms. As per this report, a charge was created in favour of

SBI, Anaparthi Branch against the VNR Refineries company assets initially for Rs.400 lakhs and subsequently enhanced to Rs.700 lakhs and Rs.1000 lakhs between 2009 and 2011 as admitted by PW35.

167.In respect of house No.1-112 in Plot admeasuring 338 Sq. Yards in S.No.254/3 was given for collateral security for the loan. Previously

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 106

A5 obtained housing loan for Rs.20 lakhs for construction of the house in Plot admeasuring 338 Sq. Yards in S.No.254/3. The said plot was already mortgaged to Commercial Branch, Kakinada by father of A5. A case was registered against A3 and one Pramod Kumar vide

CC.36/2014 for sanction of the loan of Rs.20 lakhs for construction of

the house in Plot admeasuring 338 Sq. Yards in S.No.254/3.

Subsistence of the said loan, A5 submitted title deed of house property

No.1-112 in Plot admeasuring 338 Sq. Yards in S.No.254/3 for the loan sanctioned to VNR Refineries Pvt Ltd/ A6. The officials obtained separate SME-V for Rs.400 lakhs. A separate equitable mortgage was created for Rs.20 lakhs and Rs.400 lakhs for loans.

168. The investigation officer who examined as PW41 deposed in his evidence that a house was constructed in the site admeasuring 338 Sq. Yards and the same property shown in the present case as collateral security.

169.In respect of other properties to an extent of Ac.1.53 cents in

S.No.174/2 and Ac.06.09 cents in S.No.67 and 50/2, the legal opinion given by PW4 in respect of these properties under Ex.P9, Ex.P15 having clear title over the properties. As per the Encumbrance

Certificate obtained by PW4 shows no prior encumbrances. During investigation, they obtained legal opinion from PW6 under Ex.P25 in respect of property to an extent of Ac.06.09 cents at Pekeru Village in

S.NO.67 and 50/2 which is mortgaged to State Bank of India,

Commercial bank, Kakinada by father of A5. During subsistence of said mortgage, A5 transferred the said property in favour of his wife

Bullemmai under registered gift deed dated 23.03.2007. The same property was mortgaged to State Bank of India, Anaparthi during the subsistence of 1st mortgage created by father of A5. During

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 107 investigation, Investigation officer secured the documents from PW15 who is Junior Assistant of Sub Registrar office, Rajanagaram in respect of property to an extent of Ac.1.53 cents in S.No.175/2. The prosecution case is that as per the said Encumbrance Certificate the said property was sold away to several persons. As per the investigation officer evidence/PW41 he did not collect the documents relating to sale of Ac.1.53 cents of property at Ramavaram village.

That property is covered in Ex.P15 legal opinion and he did not examine the purchasers.

170. The Panel Valuer PW21 deposed in his evidence that as per

Ex.P107 the schedule property is an agricultural land admeasuring

Ac.1.53 cents in RS.No.175/2 of Ramvaram Village of East Godavari

District. Ex.P107 to Ex.P109 which are valuation reports contain about existence of the bore well and channel irrigation for growing paddy. he further deposed that he inspected the property, made a field inspection and given valuation report under Ex.P107 and also enquired adjacent land owners for the purpose of identification of the property. They informed that the land belongs to so and so persons as mentioned in the reports. As per the valuation reports and legal opinion, all the three properties are having clear title over the said properties and to create mortgage in favour of the Bank.

171.It is pertinent to note the evidence of PW1 who submitted inspection report that N.V.Ramana Rao (A3), M.Ramana Rao (A4) have not done survey of collateral security for the sanction dated 14.03.2009. Likewise, A3 and A2 have not conducted survey of collateral security for sanction of loan dated 19.02.2010.

K.Satyanarayana (A1) Relationship Manager have not conducted survey of properties for the sanction dated 21.12.2010. A3 has not

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 108 obtained opinion report on M/s Balagam Reddy and others from

Commercial Branch, Kakinada and also not obtained credit opinion report on Saya Sai Balagam Reddy Oils Ltd., from Axis Bank,

Rajahmundry.

172.PW1 further stated in chief evidence that appraisal order in the sanction order was prepared by A.Vidya Sagar and V.Nageswara Rao by conducting pre sanction survey over the properties. On 19.02.2010 the next proposal was approved by NWCC-II, Visakhapatnam.

173.PW1 further admitted in cross examination by A3 that the Field

Officer has to collect necessary documents and the same should be forwarded through Branch Manager to CPC, Visakhapatnam for sanctioning of loan. At the time of preparing process note, if any document is required they called for the same from the Branch

Manager. If all above documents are perfect condition then only the committee will sanction the loan.

174.He further deposed in the cross examination that in case of non- receipt of pre sanction inspection report for collateral security and for other necessary documents the CPC would not process the note and ask for necessary information from Branch concerned.

175. PW22 who is Chief Manager, SBI, RBO Rajahmundry deposed in cross examination that documentation and pre sanction inspection survey report will be done by Field Officer at Bank. He will also make entries in mortgage register. In case of non availability of required document the loan will be returned by the sanction authority.

176. In the same line, PW11 deposed that the Field Officer will do pre sanction survey of the unit. The Field Officer has to inspect the property offered for security. The field Officer and Branch Manager

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 109 has to conduct post sanction survey and should be made after sanction of loan and before disbursement of loan amount.

" All the xerox copies of documents, collateral

security documents, legal opinion, report of valuation

and pre sanction inspectional report will be forwarded

to us for our process of file. If we find any defect, we

can either return the entire file to branch or to call for

any necessary document. We did not find any defect

in the file at the time of processing. "

177.After sanction of 1st loan under Ex.P1, NWCC-II LHO

Hyderabad had sanctioned the term loan of Rs.80 lakhs by way of disbursement, SLC limit of Rs.20 lakhs and LC limit of Rs.2 Crores continuation of cash credit limit of Rs.1.50 Crores on 19.02.2010 under

Ex.P2 by extending the equitable mortgage of above eight collateral security properties.

178.The investigation reveals that after sanction of 2nd sanction

dated 19.02.2010 under Ex.P2, M.Ramana Rao (A4) issued letter of

arrangement, SME-I obtained signatures of borrowers and did not affix the photographs of the borrowers and guarantors on the form and they signed on SME-III guarantee agreement and supplementary agreement SME-IV. He prepared memorandum of recording for extension of mortgage SME-VII by deposit of title deeds for enhanced limit in respect of the properties which were already mortgaged. It was signed by M.Ramana Rao (A4), P.Subba Rao (A7), the then Asst.

Manager /Advances. The allegation of the prosecution is that A4 and

A7 falsely certifying that mortgagers attended the Bank and deposited the title deeds and they are in actual possession of the properties.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 110

179. During cross examination of PW41 he deposed that A7 joined on 31.07.2009 as Asst. Manager Agricultural Advances. His name is not shown in the FIR nor in Ex.P7 complaint. Ex.P5 report does not indicate any role played by A7.

180. PW32 also admitted that Ex.P125 which deals with extension of mortgage prepared by Bank. There is no necessity to obtain signatures of the borrowers, it would be prepared by the 1st signatory who is the concerned official. The 2nd signatory need not be the concerned official.

181.The allegations of the prosecution is that Sri Mallidi Veera

Raghava Reddy and Mallidi Bullemmai signatures are not genuine as

Mallidi Veera Raghava Reddy expired on 29.09.2009 and Mallidi

Bullemmai denied to have signed any forms.

182. During evidence PW10 Mallidi Bullemmai admitted her signature on letter of confirmation for creation of mortgage by deposit of title deed which was marked as Ex.P33 on letter of confirmation for creation of mortgage by deposit of title deeds by VNR Refineries Pvt

Ltd., dated 30.03.2009 by depositing of title deeds to an extent of

Ac.5.86 cents in RS.No.67 and Ac.0.23 cents in RS.No.50/2 of Pekeru

Village.

Ex.P34 is signature of PW10 at Pg.No.9 of letter of arrangement of the loan for sanction of credit facilities of M/s VNR Refineries Pvt.

Ltd., dated 24.12.2010.

Ex.P35 is the signature of PW10 on confirmation for extension of mortgage by deposit of title deeds covering enhanced given to Branch manager, State Bank of India, Anaparthi in respect of loan sanctioned to VNR Refineries Pvt. Ltd., in respect of properties document

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 111

No.713/2007 dated 23.03.2007 and 2559/1995 dated 16.10.1995. The properties situated in RS.No.67 to an extent of Ac.6.86 cents and

Ac.0.23 cents in RS.No.50/2.

Ex.P36 is the signature of PW10 on supplemental agreement of loan cum hypothecation executed on 25.02.2010 to State Bank of

India, Anaparthi in respect of VNR Refineries Pvt. Ltd., Vemulapalli for loan cum hypothecation for Rs.400 lakhs.

Ex.P37 is the specimen signatures of PW10. Smt.Mallidi

Bullemmai/ PW10 admitted her signatures on form submitted to State

Bank of India, Anaparthi Branch for execution of the document for extension of loan taken by VNR Refineries Pvt Ltd/ A6. In respect of death of Mallidi Veera Raghava Reddy expired on 29.09.2009. The document i.e., death certificate of Veera Raghava Reddy produced under Ex.P117 filed through PW30/Panchayat Secretary which is obtained on 05.12.2013 during investigation. M.V.Narayana Reddy (A5) never informed to the Bank about the death of Mallidi Veera

Raghava Reddy nor produced any document.

183.The investigation further reveals that the cash credit register, A4 and A2 falsely certified as if all the borrowers and guarantors appeared at bank and they obtained SME-I, SME-IV and facilitating A5 for submission of forged documents.

184. M.Eswara Reddy examined as PW17. He deposed in evidence that he did not invest any amount in A6. Sunitha is his wife. They offered Ac.3.11 1/2 cents belongs to his wife as security for A6 in SBI,

Anaparthi for period of one year. After one year when he made a request to release the property, A5 replied that it will take time since the property is in Bank. The board meetings dated 03.12.2008 and

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 112 22.12.2008 under Ex.P30 do not contain his signature. He admitted the signatures of his wife in Ex.P51, Ex.P54 and Ex.P55 and also admitted his signature and signature of his wife on Ex.P31, Ex.P34,

Ex.P36, Ex.P50, Ex.P52, Ex.P56 and Ex.P57 and denied the signatures on Ex.P58 and Ex.P59 (Q17) and (Q31). His specimen signature is marked as Ex.P60 and his wife signature marked as

Ex.P61. As per the evidence of PW39, the signature of Sunitha in

Ex.P59 is belongs to her. the signature on Ex.P58 is also belongs to

PW17. But he voluntarily denied his signatures and his wife in the above documents.

185.A perusal of Ex.P62 to Ex.P65 letter of confirmation for creation of mortgage by deposit of title deeds, dated 26.02.2010 marked through PW18/ T.Srinivasa Reddy. He admitted his signatures on

Ex.P50, Ex.P31, Ex.P34, Ex.P52, Ex.P56, Ex.P36 and Ex.P57 and also admitted his signatures on Ex.P62 to Ex.P65 by deposing that he signed on above documents at State Bank of India, Anaparthi.

186. Ex.P124 to Ex.P143 are marked through PW32 who is

Assistant General Manager. He deposed that as per the request of the

Inspector of Police, CBI, Visakhapatnam, he furnished the above documents. Ex.P129 to Ex.P131 given by V.Bhuvan Kumar, M.Venkata

Narayana Reddy, V.Rajya Lakshmi. Ex.P124 is the memorandum for recording creation of mortgage by deposit of title deeds given by

M.V.Narayana Reddy, M.Veera Raghava Reddy, Mallidi Bullemmai,

Mallidi Sunitha, T.Srinivasa Reddy, Vatturi Bhavan Kumar and Akshay and they signed on 26.02.2010 in Ex.P124 to Ex.P143.

187. The Scientific Expert examined as PW39. He deposed in his evidence that the person who wrote A3, A8, A10 and A12 to A20 (Ex.P38) did not write Q1 (Ex.P31), Q4 (Ex.P31), Q6 (Ex.P52), Q10

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 113 (Ex.P52), Q12 (Ex.P52), Q14 (Ex.P52), Q16 (Ex.P52), Q19 (Ex.P36),

Q21 (Ex.P36), Q23 (Ex.P36), Q25 (Ex.P36), Q27 (Ex.P36), Q29 (Ex.P36), Q30 (Ex.P134), Q33 (Ex.P140), Q36 (Ex.P34), Q39 (Ex.P34), Q41 (Ex.P56), Q43 (Ex.P56), Q45 (Ex.P56), Q47 (Ex.P56),

Q49 (Ex.P56), Q51 (Ex.P56), , Q53 (Ex.P56), Q55 (Ex.P56), Q56 (Ex.P57), Q58 (Ex.P57), Q61 (Ex.P57), Q63 (Ex.P57), Q65 (Ex.P57) and Q67 (Ex.P57).

188. As per the evidence of PW39, Mallidi Veera Raghava Reddy who is father of A5 did not sign on guarantee agreement, supplemental agreement of loan cum hypothecation, letter of arrangement, letter of confirmation for extension of mortgage by deposit of title deeds on 25.02.2010. Prior to execution of the above said document, Mallidi

Veera Raghava Reddy expired on 29.09.2009. The signatures on

Ex.P31 letter of arrangement dated 25.02.2010, Ex.P36 supplemental agreement of loan cum hypothecation, guarantee agreement under

Ex.P52, letter of arrangement under Ex.P34, guarantee agreement under Ex.P56, supplemental agreement of loan cum hypothecation under Ex.P57 and letter of confirmation for extension of mortgage by deposit of title deeds covering enhanced limit under Ex.P134 and letter of confirmation for extension of mortgage by deposit of title deeds under Ex.P140 are not belongs to Mallidi Veera Raghava Reddy as he did not alive by that time and he did not sign at branch office Anaparthi

State Bank of India.

189. As per the evidence of PW39, he deposed in his evidence that the person who wrote the signatures in S19 to S24 (Ex.P37), A1, A2,

A4 to A7, A9, A11 and A53 did not write Q2 (Ex.P31), Q3 (Ex.P31),

Q5 (Ex.P52), Q7 (Ex.P52), Q9 (Ex.P52), Q11 (Ex.P52), Q13 (Ex.P52),

Q15 (Ex.P52), Q18 (Ex.P36), Q20 (Ex.P36), Q22 (Ex.P36), Q24

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 114 (Ex.P36), Q26 (Ex.P36), Q28 (Ex.P36), Q32 (Ex.P135), Q34 (Ex.P136), Q35 (Ex.P35), Q37 (Ex.P34), Q38 (Ex.P34), Q40 (Ex.P56),

Q42 (Ex.P56), Q44 (Ex.P56), Q46 (Ex.P56), Q48 (Ex.P56), Q50 (Ex.P56), , Q52 (Ex.P56), Q54 (Ex.P56), Q57 (Ex.P57), Q59 (Ex.P57),

Q60 (Ex.P57), Q62 (Ex.P57), Q64 (Ex.P57) and Q66 (Ex.P57).

190. As per the evidence of PW39, Mallidi Bullemmai who is mother of A5 did not sign on letter of arrangement under Ex.P31 and Ex.P34, letter of confirmation for extension of mortgage by deposit of title deeds on 20.10.2010 under Ex.P35, supplemental agreement of loan cum hypothecation under Ex.P36, guarantee agreement under Ex.P52 and Ex.P56, letter of confirmation for extension of mortgage by deposit of title deeds dated 26.02.2010 under Ex.P135 and Ex.P136. PW10

Mallidi Bullemmai denied her signatures on the above documents and she never visited SBI, Anaparthi to sign on above documents.

191. As per the evidence of PW39, the person who wrote S3, S4 (Ex.P60), A22, A24, A26, A28, A30, A32, A34, A36, A38, A40, A42,

A44, A46, A48, A50, A52 (Ex.P50) and A58 (Ex.P53) did not write Q75 (Ex.P30) and Q76 (LD.87-II). As per his evidence, M.Eswara Reddy signed on agreement of loan cum hypothecation, letter of confirmation for extension of mortgage by deposit of title deeds which was executed on 26.02.2010. The said Eswara Reddy did not sign on Ex.P30

Minutes of the meeting of Board of Directors of VNR Refineries Pvt

Ltd., held on 03.12.2008 at 11.30AM. PW39 is not given any opinion in respect of signature of T.Srinivasa Reddy in Ex.P30 whether it is genuine or not. A5 submitted Ex.P30 letter to the Branch Manager,

State Bank of India, Anaparthi dated 30.12.2008 along with minutes of meeting of the Directors of the A6. But as per the above discussion, the signatures on Minutes of Meeting are not belongs to Eswara Reddy

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 115 and Srinivasa Reddy. As per their evidence, they didn't attend the said meeting. A5 submitted forged documents before State Bank of India,

Anaparthi Branch for the loan. A4 M.Ramana Rao and Ch.Chalapathi

Rao (A2) allowed A5 for submitting the forged documents for extension of loan.

192.As per the prosecution case, A5 who is Managing Director of M/s

VNR Refineries Pvt Ltd./ A6 addressed a letter to the Branch Manager

SBI, Anaparthi on 26.10.2010 for enhancement of cash credit limit from

Rs.1.50 Crores to Rs.4.50 Crores to meet working capital requirements on account of increase in turn over. He wrote another letter on 03.12.2010 informing that they had proposal to enhance paid up capital from Rs.2 Crores to Rs.5 Crores during the financial year 2010-2011 and infuse Rs.1.70 Crores as capital / Unsecured loan. A4 and A2 submitted pre sanction inspection report. NWCC-II LHO Hyderabad sanctioned the loan on following limits on 21.12.2010 i.e., enhancement of CC limit from Rs.1.50 Crores to Rs.4.50 Crores.

Renewal of SLC limit of Rs.20 lakhs at existing level. Renewal of LC limit of Rs.2.00 Crores at existing level, with an observation to obtain

additional collateral security of Rs.0.50 crores.

193.M.Ramana Rao (A4) and Ch.Chalapathi (A2) submitted pre sanction inspection report without mentioning the date and remarked that stocks are available to cover the outstanding and working of unit was satisfactory and also stated that inspection was conducted by them in pursuance of the request of the unit for increasing working capital from Rs.1.50 crores to Rs.4 Crores. The request of unit was processed by K.Satyanarayana (A1), the then Relationship Manager (ME) and Sri S.A.Atchutharamayya the then Credit Support Officer ME

Sales Hub RBO, Kakinada sent a proposal to circle credit committee

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 116 local head office SBI Hyderabad vide appraisal note dated 14.12.2010 recommending renewal of working capital with enhancement from

Rs.1.50 crores to Rs.4.50 Crores and renewal of other limits and confirmation of branch action in continuation of limits beyond the validity period of previous sanction dated 14.03.2010. The said proposal was approved by CCC-II Hyderabad in meeting dated 21.12.2010. The committee directed the branch that enhanced portion of working capital should be made available only on infusion of

additional capital of Rs.3 Crores as envisaged and creation of collateral

security of Rs.50 Crores and also possibility of fixing the repayment period from term loans to 4 years.

194.In continuation of the approval, A1 requested the branch vide letter dated 24.01.2011 to submit compliance to the conditions of above mentioned sanction and ensure registration of charge with ROC for enhanced liability to a tune of Rs.9.79 Crores. A2 addressed letter

dated 02.02.2011 that auditor certificate for conversion of share

application of Rs.3 Crores as paid up capital and infusion of Rs.1.70

Crores as share application money was obtained and unit applied for registration with ROC for Rs.9.79 Crores, additional collateral security was obtained on 24.12.2010. All the existing EMIs have been extended to cover the enhanced limit, the unit promised to pay

December installments within a week opinion report on the new guarantors assets and liabilities was obtained, CIRSIL rating was obtained and a letter would be obtained about term loan instalments in 4 years.

195. Sri V.V.Satyanarayana, Charted Accountant certified that the directors of A6 invested Rs.1.19 Crores by Mallidi Venkata Narayana

Reddy/A5, Mallidi Eswara Reddy, Tetali Srinivasa Reddy, Vatturi

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 117

Bhavan Kumar invested Rs.27 lakhs each vide certificate dated 21.12.2010. He also certified that the existing share application money of Rs.3 lakhs was converted as paid up capital. The said letter was addressed to Branch manager, SBI, Anaparthi and he also reported that the board of Directors of the company decided to infuse Rs.1.70

Crores as working capital before 31.03.2011. He stated that these certificates were given by him on the basis of books of accounts presented by representatives of A6 and they are not supposed to verify the sources for infusion.

196. The said Satyanarayana examined as PW20. He deposed in his evidence that he gave a certificates to A6 company. As per the

Page No.886 of Ex.P40 certificate was given by him to A6 with regard to investment of capital of Rs.1.70 Crores offered by A6 on or before 31.03.2011. As per Page No.867 of Ex.P40 the certificate given on 21.12.2010 discloses that A6 want to enhance their authorized capital from Rs.200 lakhs to Rs.500 lakhs. A6 company already had share application money to tune of Rs.300 lakhs that was converted as authorized capital. As per Page No.878 in Ex.P40 certificate dated 24.02.2010 indicates about the particulars of shareholders of A6 i.e.,

A5 at Rs.1.19 Crores, PW17, PW18 and Bhavan Kumar each Rs.27 lakhs making total of Rs.2 Crores. As per Page No.879 Ex.P40 such report given by him indicates that the particulars of directors, paid up capital of A6 registered office company CIN Number and name of the company. As per Page No.881 of Ex.P40 such report dated 22.10.2010 particulars of directors paid up capital of A6 registered office address company CIN Number. As per Page No.883 dated 01.12.2010 for financial year 2008 to 2009 and 2009 to 2010 of A6. He also admitted that he given the above certificates based on the books

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 118 of accounts, bills, vouchers, vat returns and excise returns submitted by A5. Amounts from term loan accounts will be paid to machinery suppliers and capital goods. From CC accounts amounts to be paid to raw material, chemical suppliers, spare parts in this case sometimes amounts were transferred to current account of A6. The said transfer is not correct.

197.The investigation further reveals that annual return filed on 29.09.2011 along with form No.20-B it is seen that A5 is the Managing

Director and Tetali Srinivas Reddy, mallidi Eswara Reddy are the

Directors and there was no mention about Vatturi Bhavan Kumar. It is also seen that on 31.03.2011 paid up capital was Rs.5 Crores in A6 breakup of which is M.V.Narayana Reddy Rs.1.72 Crores Tetali

Srinivasa Reddy Rs.63, 50,000/-, Mallidi Eswara Reddy

Rs.63,50,000/-, Vatturi Bhavan Kumar Rs.6 lakhs, Mallidi Sesharatnam

Rs.45 lakhs, Tetali Venkata Reddy Rs.45 lakhs, Mallidi Venkata

Bulireddy Rs.35 lakhs Mallidi Lakshmi Rs.25 lakhs, Tetali Tejovathi

Rs.45 lakhs.

198. Mallidi Eswara Reddy was examined as PW17. He deposed in his evidence that he never attended the board meetings of A6 dated 03.12.2008 ad 22.12.2008. The signatures on Ex.P13 are not belongs to him. He did not invest any amount in A6. Sunitha is his wife. They offered only Ac.3.11 1/2 cents of land belongs to his wife as security for

A6 in SBI, Anaparthi for a period of one year. Thereafter, A5 replied that it will take time for release of the property. He admitted that they subscribed their signatures on documents at SBI, Anaparthi Branch.

He sustained heavy loss and cheated in the hands of A5.

199.During cross examination, PW17 stated that from the time of inception of A6, he is one of the Directors of A6 and he subscribed his

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 119 signatures only as a guarantor in the capacity of Director of A6. As per his evidence, their family members not invested any amount in M/s

VNR Refineries Pvt Ltd/A6.

200. The evidence of Tetali Srinivasa Reddy/ PW18 reveals that A5 himself PW17 and Bhavan Kumar are Directors of A6. A5 is its

Managing Director. Their family members invested Rs.40 lakhs in A6.

they did not get any profit from A6 and never attended the board of directors meeting in A6. But he admitted his signatures in Ex.P30. As per his evidence, his family members invested only Rs.40 lakhs.

201.As per the Ex.P30 enclosure minutes of meeting, the directors are A5, PW17, PW18 and V.Bhavan Kumar. As per the prosecution case, the said Bhavan Kumar's whereabouts not known and also not signed in Form 20-B submitted along with annual return dated 29.09.2011.

202.As per the above discussion, A5 is the Managing Director of A6 submitted false declaration about the infusion of funds and enhancement of paid up capital from Rs.3 Crores to Rs.5 Crores.

203. The investigation further discloses that RMME Sales Hub concept, the documentation work has to be attended by RMME. With reference to the sanction dated 21.12.2010 even before the receipt of formal communication from the competent authority through RBO

Kakinada, Ch.Chalapathi Rao (A2) issued a letter of arrangement on 24.12.2010 and obtained signatures of borrowers A5, Bhavan Kumar

PW17, PW18 and guarantors Mallidi Veera Raghava Reddy (died),

Mallidi Bullemmai, Sunitha, Akshay and Rajyalakshmi and photos of the borrowers and guarantors are not affixed. The borrowers and guarantors signed on guarantee agreement SME-III and supplemental

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 120 agreement of loan cum hypothecation SME-IV on 24.12.2010.

Additional guarantor Karri Chandra Sekhara Reddy also signed in

SME-III and SME-IV. A2 and A4 prepared opinion report SSI NO.4 about Karri Chandra Sekhara Reddy wherein the details of assets had by him as Ac.7.20 cents and residential house in 250 Sq. Yards. A2 and A4 without complying with KYC norms in respect of Karri Chandra

Sekhara Reddy assessed network without ascertaining basic details and documentary evidence for residential house. A4 prepared memorandum for recording creation of mortgage by deposit of title deeds SME-V on 24.12.2010 in respect of Ac.7.20 cents in RS.No.173 possessed by Karri Chandra Sekhara Reddy/guarantor and along with

A7 falsely certified confirming that Chandra Sekhara Reddy appeared at Bank and confirmed possession of title. A4 prepared memorandum for recording creation of mortgage by deposit of title deeds covering enhanced limits on 24.12.2010 mentioning the names of Mallidi Veera

Raghava Reddy (died), Sunitha, Tetali Srinivasa Reddy, Bullemmai,

V.R.Akshay, Rajyalakshmi, A5 and A7 also signed in the form confirming the appearance of all the borrowers and guarantors at Bank and confirmed extension of existing mortgage. SME-VII and SME-VIII are not available in the branch. A2 and A4 certified that they read and explained the details to the borrowers and guarantors and making entries in EM register. As per the discussions above, father of A5 died prior to 24.12.2010. Bullemmai denied her signatures in the documents and never appeared before the State Bank of India,

Anaparthi branch.

204.In respect of additional property offered as collateral security by

Karri Chandra Sekhara Reddy, As per the discussions in Point No.2 with regard to additional collateral security for an extent of Ac.7.20

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 121 cents in RS.No.173 possessed by Karri Chandra Sekhara Reddy.

K.V.Murali Mohana Rao, Panel Valuer/PW21 submitted report on 21.12.2010 stating that he inspected the above property on 20.12.2010 and perused the document and assessed market value of

Rs.1,18,80,000/- and distress sale value Rs.97,20,000/-.

V.V.R.Subramanyam/PW4 also given legal opinion by stating that Karri

Chandra Sekhara Reddy having clear title. V.V.R.Subramanyam/PW4 deposed in the evidence that basing on the settlement deed, he gave legal opinion.

205.The Panel Valuer deposed in his evidence that Ex.P106 is the schedule property to an extent of Ac.7.20 cents in S.No.173. He given the report basing on document No.124/1949. At the request of the then Branch Manager, he gave report. One of the employees of A6 company produced the documents. He did not physically measure the schedule property. As per their evidence, they gave report basing on the documents submitted to them. They did not physically verified the property.

206.As per the evidence of PW25 and Ex.P115, Karri Chandra

Sekhara Reddy has no land in S.No.173. The said land belongs to others under Ex.P115. Ex.P20 the settlement deed dated 20.10.1949 is the forged document and there is no person in the name of Karri

Chandra Sekhara Reddy. As per the evidence of PW25, PW15, PW16 and Ex.P20, the borrowers submitted forged document for additional security when the loan taken by VNR Refineries Pvt Ltd.

207. Disbursement :At this juncture, if he come to valuation reports marked as Ex.P106 to Ex.P111 through PW21 and it discloses about the valuation of properties which were given for collateral security.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 122

Exhibits Description of the property Estimated Value of

the property

Ex.P107Ac.1.53 cents in RS.No.175/2 of Rs.76,50,000/- Ramavaram village

Ex.P108Ac.06.09 cents in RS.No.67 and Rs.42,63,000/- 50/2 of Pekeru village

Ex.P109Ac.03.11 1/2 cents in RS.No.35 Rs.25,96,000/- and 34/2 of Mukkinada panchayat

Ex.P110Industrial site total extent of Rs.50,05,000/- Ac.07.15 cents in RS.No.52 at Dwarampudi Grampanchayat

Ex.P111Residential building D.No.9-75 in Rs.35,90,000/- RS.No.672/7A/1A of Anaparthi to an extent of 436 Sq. Yards

Ex.P106Ac.07.20 cents in RS.No.173 of Rs.1,08,00,000/- Anaparthi

208. As per the evidence of Panel valuer PW21, he gave valuation reports by seeing the photocopy of documents. He did not meet the onus of the properties. But he met M.Venkata Narayana Reddy (A5).

During cross examination by A2, he deposed that he inspected the property and made a field inspection and given valuation report under

Ex.P107 and also enquired adjacent land owners for the purpose of identification of the property. During cross examination of A3, he deposed that he furnished the above values basing on the market value prevailing in the vicinities of land properties. He did not make any enquiry at Sub Registrar office in this connection. He further deposed that to identify the property, they enquired local people. The

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 123 value of the property depends on its location. Ex.P107 to Ex.P109 contain about existence of bore well and channel irrigation for growing paddy.

As per the discussions in Point No.2, in respect of the factory site

Ac.05.55 cents in RS.No.52 in Ex.P110 the property was sold in

Sarfaesi by Bank under Ex.P177.

209.In respect of Ac.1.53 cents in RS.No.175/2 of Ramavaram village under Ex.P107, the property was sold by Mallidi Veera

Raghava Reddy to different persons before the date of creation of mortgage with State Bank of India, Anaparthi for the loan sanctioned to

A6.

210.In respect of Ac.06.09 cents in RS.No.67 and 50/2 of Pekeru village under Ex.P108, this property was mortgaged to State Bank of

India, Commercial Branch, Kakinada by father of A5, during the subsistence of said mortgage A5 given the said property as collateral security to the loan taken by A6 from State Bank of India, Anaparthi.

211.In respect ofResidential building D.No.9-75 in

RS.No.672/7A/1A of Anaparthi to an extent of 436 Sq. Yards under

Ex.P111, this property was mortgaged to the loan sanctioned to M/s

Balagam Reddy and others and Parvathi Parameswara Rice mill by

Tetali Srinivasa Reddy. Again the said property was mortgaged for the loan taken by A6.

212.In respect of Ac.07.20 cents in RS.No.173 of Anaparthi under

Ex.P106, A5 submitted the forged document for additional security for the loan taken by VNR Refineries Pvt Ltd. There is no person in the name of Karri Chandra Sekhara Reddy.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 124

213.The prosecution case is that A4 and A5 did not obtain bills for purchase of plant and machinery and they allowed transfer of funds from term loan to current account without obtaining bills for purchase of plant and machinery on different dates.

214.As per the prosecution case, with regard to utilization of term loan, as per undated statement, A5 furnished a certificate incorporating the details of supplier, amount paid, mode and date of payment for each particular machinery for a total amount of Rs.1,95,80,491/-. The completion report dated 26.11.2009 K.V.Murali Mohan, Panel Engineer

Rajahmundry estimated cost of the construction of the refinery (Civil works) at Rs.73,64,000/- and enclosed photographs of the construction under Ex.P.40 'A' a search report dated 30.03.2011 and completion report dated 26.11.2009 given by K.V.Murali Mohan by certifying that the construction of civil work of A6 and construction was completed and it was fit for occupation. With regard to machinery K.S.Chiranjeevi,

Surveyor, Rajahmundry who conducted inspection of A6 on 29.10.2010 and reported that the unit was commissioned in August 2009 with an installed capacity of 100 MT per day for refining vegetable oils from crude oils. The estimated cost of machinery at Rs.6,67,22,131/- and enclosed photographs of the machinery. The unit inspection report given by A4 under Ex.P156 inspected the unit on 28.09.2010 which was countersigned by A2 and they made an observation that the unit is functioning at the time of visit and they met A5. Pre sanction inspection report given by Relationship Manager/A1 under Ex.P181 dated 19.10.2010 stating that the unit is existing from 14.03.2009. The inspection report dated 18.01.2012 prepared by Relationship Manager on 18.01.2012 under Ex.P185. Ex.P186 is the note dated 10.02.2012 among AGM Venkanna babu and new promoters regarding change of

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 125 directors for VNR Refineries Pvt. Ltd. No bills were obtained by A2 to

A4 with regard to purchase of the plant and machinery and failed to ensure proper end use of the funds.

215. As per the evidence of PW1 during cross examination by A3 that A3 disbursed only part of the sanctioned loan amount. The case file contains CA reports given by V.V.Satyanarayana Chartered

Accountant, Rajahmundry under Ex.P113. In the month of March 2009 the loan was sanctioned and in between 2009 and 2010 internal audit and inspections were taken place, after audit and inspection reports will be submitted by them to Branch Office, Corporate office and Head office. He gone through the said reports. He further stated that he do not remember whether the said audit and inspection reports do not contain any adverse remarks.

216. The investigation officer/ PW41 deposed in the cross examination that there will be an internal audit in the bank relating to loans. The defects if any will be pointed by the inspection team, he did not collect those internal audit reports. He also admitted that there was no cash credit disbursement by A3 during his tenure at Anaparthi branch. As per the report of K.S.Chiranjeevi, Private Surveyor, by

August 2009 A6 company reported to have commenced its production.

He also admitted that A3 Ramana Rao was transferred from Anaparthi branch in June 2009.

As per the evidence, A3 disbursed term loan amount of Rs.1.15

Crores out of Rs.2.50 Crores. A3 not disbursed cash credit of Rs.1.50

Crores.

217.The investigation reveals that the transfer of cash credit account to current account of the borrower are not permitted. Heavy cash

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 126 withdrawals also not permitted. A4 and A7 allowed transfer of amounts from cash credit account No.30901617711 to current account of VNR

Refineries Pvt Ltd. vide A/c No.30637887824. A2 and A1 deliberately did not object these transfers and withdrawals and failed to ensure proper end use of funds.

Sl.ChequeDate AmountPassed by Nature of No.No.entry 1287101 24.09.20096,00,000M.Ramana Transferred Raoto current account of 2287105 20.10.20099,00,000M.Ramana M/s VNR Rao Refineries 3287109 28.10.20096,00,000Not known Pvt Ltd. 4287110 30.10.20096,50,000M.Ramana 5287113 09.11.20098,00,000P.Subba Rao 6287114 10.11.200915,50,000-do- 7287117 16.11.200921,50,000Not known 8287120 18.11.200911,00,000M.Ramana Rao 9287129 04.12.200913,00,000Not known 10 287135 14.12.200914,50,000Not known 11 287139 18.12.20096,50,000M.Ramana Rao 12 287140 22.12.20096,50,000M.Ramana Rao 13 287142 24.12.200912,40,000-do- 14 287143 29.12.20097,00,000Not known 15 287148 08.01.201012,90,000P.Subba Rao 16 287149 12.01.20106,00,000-do- 17 287150 13.01.20106,50,000-do- 18 287153 27.01.20106,22,000M.Ramana Rao 19 287154 01.02.20104,85,000-do-

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 127 20 287155 03.02.20106,30,000-do- 21 287159 26.02.201040,00,000-do- 22 287160 03.03.201040,00,000-do- 23 287161 11.03.201037,00,000-do- 24 287165 18.05.20104,00,000-do- 25 287169 25.05.20105,00,000-do- 26 287170 03.06.20104,50,000-do- 27 287172 10.06.201011,00,000Not known 28 287173 12.06.201030,00,000Not known 29 287180 26.06.20108,50,000M.Ramana Rao 30 287182 28.06.201011,00,000-do- 31 287186 05.07.201011,50,000P.Subba Rao 32 287191 13.07.201011,00,000M.Ramana Rao 33 287193 20.07.201015,00,000-do- 34 287197 27.09.201015,00,000P.Subba Rao 35 287199 04.11.20104,00,000M.Ramana Rao 36 106146 28.09.201011,00,000Not known 37 106149 15.11.201010,50,000M.Ramana Rao 38 106155 24.12.201010,00,000-do-Cash received by 39 352384 10.01.201127,00,000-do- Sandeep 40 352403 26.02.20114,00,000Not known Reddy 41 352439 23.05.20113,00,000P.Subba rao 42 352457 24.09.20111,00,000Not known 43 352464 29.09.201116,00,000P.Subba

Total 4,05,17,000

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 128

218.The investigation further reveals that from the above entries from 38 to 44, Sri Sandeep Reddy, the then Clerk of A6 confirmed to have received the cash against above cheques and hand over to A5. It found that from the cash credit account A5 either transferred funds to the current account of A6 or received money in cash. A2 allowed to transfer of Rs.24,10,000/- vide cheque No.287162 dated 17.03.2010 from cash credit account as margin money towards LC.Account of A6.

Similarly vide cheque No.287183 dated 28.06.2010 for Rs.9,50,000/- and cheque No.287171 dated 08.06.2010 for Rs.14,66,250/- were transferred towards fixed deposits. Both the cheques were passed by

A4. A5 allowed to divert Rs.70,000/- on each occasion on 26.02.2010 and 11.06.2010 and Rs.17,000/- on 25.02.2011 from cash credit account No.30901617711 to the housing loan A/c No.30386027350 of

A5 towards repayment of housing loan availed from SBI Anaparthi branch.

Sl.No. Date Amount Recommended by Approved by

128.03.2009 27,00,000-No authorisation 202.04.2009 5,00,000- 307.04.2009 2,00,000- 413.04.2009 16,00,000 M.Ramana RaoN.V.Ramana Rao 502.05.2009 3,00,000 604.05.2009 12,00,000 715.05.2009 28,00,000 826.05.2009 3,00,000 904.06.2009 2,00,000 1019.06.2009 17,00,000N.V.Ramana Rao 1101.07.2009 11,00,000Not known 1213.07.2009 30,00,000-N.V.Ramana

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 129

Rao 1321.07.2009 14,00,000-Not known 1427.07.2009 9,00,000M.Ramana Rao 1501.08.2009 4,00,000- 1627.08.2009 4,50,000M.Ramana Rao- 1714.08.2009 6,50,000-

219.A3 and A4 allowed/authorized transfer of funds from term loan account No.30725577979 to the current account of VNR Refineries Pvt

Ltd without obtaining bills in support of the payments made towards capital expenditure and invoices pertaining to the purchase of plant and machinery.

220.The procedure for disbursement of the amount for term loan cash credit loan is the amount will be disbursed directly to the supplier who supplied the machinery. If it is not possible to pay the amount to supplier, then the amount will be paid to borrower against production of necessary bills. The Field Officer has to conduct periodical inspection.

221.The procedure for letter of credit facility for supplying raw material to ensure payment on due date. The borrower will approach the bank with LC application cum indemnity bond and purchase order and terms of credit. Then the bank will issue letter of credit on bank standards stationery. The letter of credit facility will be issued to beneficiary bank directly. Then the beneficiary bank will advise the supplier about the establishment of letter of credit and its terms. If the terms are acceptable to the supplier he will supply the material to LC applicant. After receiving the bill from beneficiary bank, the bank will

honour the bills and recover the amount from cash credit loan facility or

from current account of borrower. The duty of Field Officer is to

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 130 prepare a note detailing about the terms of the loan, terms of credit and nature of material, availability of limit to the unit, margin money and the recovery of commission.

222.In this case who worked in A6 company from 2009 to 2012 by name Venkata Sandeep Reddy examined as PW19 deposed that he used to attend duty to pay charges to lorries and labour. One Brahmaji

Account Assistant and Venugopal, Account Manager also worked along with him. One Ravi acted as Accounts Assistant and Ramu worked as Clerk. He used to attend bank transactions of A6 at SBI

Anaparthi.

Ex.P.68 is cheque given by A-6 for Rs.18,56,300/-, dated 21.05.2010,

Ex.P.69 is cheque given by A-6 for Rs.18,56,300/-, dated 22-05-2010.

Ex.P.70 is cheque given by A-6 for Rs.34,00,050/-, dated 24-12-2010.

Ex.P.71 is cheque given by A-6 for Rs.43,00,050/-, dated 24.12-2010.

Ex.P.72 is cheque given by A-6 for Rs.37,66,850/-, dated 24-12-2010.

Ex.P.73 is cheque given by A-6 for Rs.5,58,013/-, dated 24-12-2010.

Ex.P.74 is cheque given by A-6 for Rs.17,56,916/-, dated 31-12-2010.

Ex.P.75 is cheque given by A-6 for Rs.10,00,000/-, dated 24.12.2010 (self cheque).

Ex.P.76 is cheque given by A-6 for Rs.27,00,000/-, dated 10.01.2011 (self cheque).

Ex.P.77 is cheque given by A-6 for Rs.4,00,000/-, dated 26.02.2011 (self cheque).

Ex.P.78 is cheque given by A-6 for Rs.27,80,282/-, dated 11-03-2011.

Ex.P.79 is RTGS remittance slip dated 10-03-2011.

Ex.P.80 is cheque given by A-6 for Rs.20,00,050/-, dated 19-04-2011.

Ex.P.81 is cheque given by A-6 for Rs.9,00,050/-, dated 30-04-2011.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 131

Ex.P.82 is RTGS remittance slip dated 30-04-2011.

Ex.P.83 is cheque given by A-6 for Rs.27,00,050/-, dated 13-05-2011.

Ex.P.84 is cheque given by A-6 for Rs.27,33,224/-, dated 13-05-2011.

Ex.P.85 is cheque given by A-6 for Rs.18,00,050/-, dated 13-05-2011

Ex.P.86 is cheque given by A-6 for Rs.22,50,050/-, dated 18-05-2011.

Ex.P.87 is cheque given by A-6 for Rs.5,10,326/-, dated 18-05-2011.

Ex.P.88 is cheque given by A-6 for Rs.9,14,710/-, dated 19-05-2011.

Ex.P.89 is cheque given by A-6 for Rs.17,00,050/-, dated 19-05-2011.

Ex.P.90 is cheque given by A-6 for Rs.10,13,682/-, dated 19-05-2011.

Ex.P.91 is cheque given by A-6 for Rs.3,08,955/-, dated 23-05-2011.

Ex.P.92 is cheque given by A-6 for Rs.3,00,000/-, dated 23-05-2011.

Ex.P.93 is RTGS remittance slip dated 23-05-2011.

Ex.P.94 is cheque given by A-6 for Rs.27,00,050/-, dated 11-06-2011.

Ex.P.95 is RTGS remittance slip dated 13-06-2011.

Ex.P.96 is cheque given by A-6 for Rs.9,04,478/-, dated 14-06-2011.

Ex.P.97 is RTGS remittance slip dated 14-06-2011.

Ex.P.98 is RTGS remittance slip dated 16-06-2011.

Ex.P.99 is RTGS remittance slip dated 27-06-2011.

Ex.P.100 is cheque given by A-6 for Rs.20,00,050/-, dated 22-09-2011.

Ex.P.101 is cheque given by A-6 for Rs.16,00,050/-, dated 23-09-2011.

Ex.P.102 is RTGS remittance slip dated 27-09-2011.

Ex.P.103 is cheque given by A-6 for Rs.1,00,000/-, dated 24-09-2011.

Ex.P.104 is cheque given by A-6 for Rs.16,00,000/-, dated 29.09.2011 (self).

Ex.P.105 is cheque given by A-6 for Rs4,58,335/-, dated 29-09-2011.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 132

223.During cross examination by A5 and A6, he deposed that after withdrawing the amounts covered by self cheques, he used to give the amount to Venugopala Rao, Manager Accounts and in turn he used to look after about the said amount and disbursed the said amount to payment of chemical charges, lorry freight charges, labour charges, salary payments, fuel charges and husk payments. Sometimes upto

Rs.15 lakhs per day used to be made for husk charges. But no bills were produced by A5 for proof of payment of above charges. The above cheques under Ex.P68 to Ex.P78, Ex.P80, Ex.P81, Ex.P83 to

Ex.92, Ex.P94, Ex.P96 and Ex.P101 to Ex.P105 withdrawn the amount from cash credit account No.30901617711 from 21.05.2010 to 29.09.2011. A perusal of Ex.P68, Ex.P74, Ex.P86, Ex.P87, Ex.P91,

Ex.P92, Ex.P93, Ex.P96, Ex.P97, Ex.P105 passed the above cheques by A7 by putting his signatures and entered in computer. He also countersigned in Ex.P125, Ex.P142 and Ex.P143.

224. PW32 who is Asst. General Manager, SME Centre,

Visakhapatnam on the request of CBI, Visakhapatnam, he furnished the documents pertaining to this case. He furnished Ex.P166 the bunch of original cheques and vouchers pertaining to A6 company vide cheque bearing No.287101, 287105, 287109, 287110, 287113, 287114, 287117, 287120, 287129, 287135, 287139, 287140, 287142, 287143, 287148, 287149, 287150, 287153, 287154, 287155, 287159, 287160, 287161, 287182, 287183, 287186, 287191, 287193, 287195, 287197, 287199 which are parts of Ex.P166 were issued for transfer of funds from cash credit account of VNR Refineries Pvt Ltd., to the current account of the company. A perusal of the cheques and also furnished the vouchers and cheques under Ex.P171 pertaining to A6

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 133 company for transfer of funds from the current account of VNR

Refineries Pvt Ltd., to the housing loan account of A5.

225.A perusal of the cash credit account statement No.30901617711 under Ex.P168 the statement for the period from 01.04.2010 to 30.09.2010. Under Ex.P169 the statement of account No.30901617711 for the period from 23.09.2009 to 28.02.2010 which reveals the transfer of the funds from cash credit account of A6 loan to the current account of VNR Refineries Pvt Ltd., vide A/c No.30637887824 which is part of

Ex.P162 through cheques which were marked under Ex.P166. As per the evidence of PW19 Sandeep Reddy the then Clerk of A6, he received the cash by presenting the cheques pertaining to the cash credit Account No.30901617711 under Ex.P75 for Rs.10,00,000/-,

Ex.P76 for Rs.27,00,000/-, Ex.P77 for Rs.4,00,000/-, Ex.P92 for

Rs.3,00,000/-, Ex.P103 for Rs.1,00,000/- and Ex.P104 for

Rs.16,00,000/- and handover the amount to M.Venkata Narayana

Reddy / A5. Which reveals that A5 transferred the funds from the cash credit account No. 30901617711 to the current account of VNR

Refineries Pvt Ltd., vide A/c No. 30637887824 through transfer and received money in cash. The cheques transfers and withdrawals are allowed by M.Ramana Rao/A4 who worked as Assistant Manager, SBI,

Anaparthi from 2009 to 2011 and P.Subba Rao /A7 Assistant Manager,

SBI, Anaparthi from 31.07.2010 to 17.10.2013. During that period A2 is the Branch Manager of SBI Anaparthi branch for the period from 16.11.2009 to 01.10.2011. They failed to ensure the proper end use of the funds.

226.The prosecution case reveals that A2 allowed transfer of

Rs.24,10,000/- vide Cheque No.287162, dated 17.03.2010 from Cash

Credit Account as margin money towards LC account of M/s VNR

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Refineries Pvt. Ltd. Similarly Cheque No.287183, dated 28.06.2010 for

Rs.9,50,000/- and Cheque No.287171, dated 08.06.2010 for

Rs.14,66,250/- were transferred towards fixed deposits. The above two cheques were passed by A4. A5 was allowed to divert Rs.70,000/- on each occasion on 26.02.2010 and 11.06.2010 and Rs.17,000/- on 25.02.2011 from Cash Credit Account No.30901617711 to the Housing

Loan Account No.30386027350 of A5 towards repayment of housing loan availed from State Bank of India, Anaparthi Branch.

227.M.Venkata Narayana/A5 diverted Rs.70,000/- cash each on 26.02.2010 and 11.06.2010 and Rs.17,000/- on 25.02.2011 from cash credit account No.30901617711 to the housing loan account

No.30386027350 of A5 towards repayment of housing loan availed from SBI, Anaparthi branch.

228.PW32 who handover the Ex.P171 bunch of cheques and vouchers of A6 company along with list of vouchers and covering letter

dated 21.10.2013 which is marked as Ex.P172. He deposed that

under cover of Ex.P171 vouchers and cheques, the funds were transferred from the current account of VNR Refineries Pvt Ltd., to the housing loan account of A5. The list of Ex.P171 is annexed to Ex.P172.

A perusal of Ex.P171, the amount of Rs.17,000/- was transferred from cash credit account No.30901617711 on 25.02.2011 to the housing loan account of A6 vide A/c No.30386027350 through cheque

No.352402 and account foil. The statement of account of

M.V.Narayana Reddy/A5 is part of Ex.P171 reveals that the amount of

Rs.70,000/- on two occasions dated 26.02.2010 and 11.06.2010 transferred from cash credit account No. 30901617711 to the HTL account of A5.

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229. PW32 deposed in evidence that the Field Officer of the branch maintained the register of letter of credits. Ex.P175 shows that 34 letter of credits were given to VNR Refineries Pvt Ltd.

Letter of credit bearing No.28 of Ex.P175 was issued on 29.08.2011 and it was closed on 01.03.2012.

Letter of credit bearing No.30 of Ex.P175 was issued on 02.09.2011 and it was closed on 06.01.2012.

Letter of credit bearing No.32 of Ex.P175 was issued on 13.09.2011 and it was closed on 26.12.2011.

Letters of credit bearing Nos.21, 26 and 29 are not reflected in

Ex.P175.

Ex.P187 is the SBI Sales Hub RBO Kakinada inspection report.

As per Ex.P187, the major observations on 10.01.2012 that the unit is shut down. Through PW3, Ex.P8 is marked which is inspection report submitted by A1 on 10.01.2012. He submitted that the unit was shut down due to non availability of stocks and MD Sons availability. He gave instruction to A1 about further force action. He further deposed that in the said report, Karur Vysya Bank addressed a letter to the SBI,

Anaparthi for retirement of bills and branch could not locate the issuance of LC and contacted A1 for guidance. A1 rushed to the Karur

Vysya Bank, Kakinada to ascertain the position. The Karur Vysya

Bank issued outstanding list of LCs to A1 and the said process fake

LCs were detected. He also deposed that the Regional Manager monitors the activities of sales hub at RBO Kakinada. As per Ex.P5 report the Karur Vysya Bank furnished the list of outstanding LCs and fake LCs i.e., LC.No.26, 29 and 31.

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Letter of credit bearing No.31 for Rs.44,17,920/- was issued on 07.09.2011 and cancelled on 13.09.2011.

230. During cross examination, PW32 deposed that he stated

before the Inspector of Police that the signatures of letter of credit

No.26 dated 19.08.2011 and letters of credit No.29, 31 dated 29.08.2011, 09.09.2011 are not genuine signatures of A4 and A7 respectively.

231.The investigation reveals that on 22.08.2011 A5 made request with the Branch Manager, SBI, Anaparthi for allowing limit of Rs.1

Crore would repaid in 45 days and would submit the proposals for renewal along with audit financials for the year 2010 to 2011 by 30.09.2011. On this request, A1 and J.Chandra Sekharam the then

General Manager, SBI RBO Kakinada mooted a proposal on 23.08.2011 recommending sanction of adhoc limit of Rs.1 Crore for a period of 45 days over and above existing cash credit limit stating that the company had to honour ILC payments as they receivables struck in the pipeline and also reported that working capital gap for full capacity utilization of plant the company proposed to approach the bank for enhancement of working capital limits along with auditor financials for 2010 to 2011 by 30.09.2011. In the appraisal note they reported that certain irregularities in the conduct of accounts sanctioned/renewal on 21.10.2010. This proposal was presented by A1 RMME to the CCC-II committee LHO Hyderabad through video conference on 26.08.2011 vide agenda item No.27 VSP 2011-12-16-377. CCC-II rejected the proposal as withdrawn directing the branch to resubmit the proposal after existing term loan is the regularized. They also instructed the branch to stop issue of fresh LCs and explore the possibility for

additional collateral security. The decision sheet dated 26.08.2011 of

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CCC-II containing the instructions was received by Regional Business

Office on 09.09.2011. By this time, A4, A7 Asst. Managers of SBI

Anaparthi and A2 the then Branch Manager, SBI Anaparthi branch established the LC.No.28 dated 29.08.2011 for Rs.30, 28,480/- and

LC.No.30 dated 02.09.2011 for Rs.52,13,520/- and LC.No.32 dated 13.09.2011 for Rs.44,92,800/- for total Rs.1,27,34,800/- at the request of A5, who is the Managing Director of A6. A6 did not honour them SBI

Anaparthi branch closed above three on 02.03.2012, 13.03.2012 and 26.12.2011 by debiting the above amounts to the cash credit account of A6. LC.NO.28 signed by A7 and A4 LC.No.30 signed by A4 and A2.

232. PW1 deposed in evidence that on 26.08.2011 a proposal for sanction of Rs.1 Crore as adhoc cash credit limit for a period of Rs.45 lakhs proposed by A1 and recommended by J.Chandra Sekharam.

This proposal was declined by CCC-II LHO Hyderabad. The committee made a stipulation that no further LC should be opened and the term loan will be regularized. The said refusal of adhoc CC limit is

Ex.P4. It was communicated to RBO, Kakinada on 09.09.2011.

233.During cross examination by A1, PW1 deposed that as per

Ex.P4 General Manager and two Deputy General Managers were present in CCC-II meeting conducted on 26.08.2011. Minutes were prepared by secretary to CCC-II. There were no written instructions

RMME Kakinada Sales Hub Model situate in RBO will report to the

Regional Manager and Branch Manager about the withdrawal of sanction and stoppage of LCs. In this matter RMME reported the matter to Regional Manager and to Branch Manager on the same date.

He mentioned the same in Ex.P5 personal guarantees and securities were renewed for 3rd time.

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234.During cross examination by A2, PW1 deposed that he did not file any proof to Court to show that by 09.09.2011 Ex.P4 was received in Anaparthi branch and when it was received by Anaparthi branch. It does not contain any covering letter from RBO Kakinda to show that it was sent to Anaparthi branch.

235. PW33 Chandra Sekharam deposed in evidence that A1 being

MERM prepared proposals for adhoc grant of Rs.1 Crore basing on application submitted by A6 company. Page No.329 in Ex.P41 are the proposals submitted by A1 when A6 company applied for adhoc excess drawings of Rs.1 Crore. Basing on the proposal of A1, he recommended said adhoc excess drawings of Rs.1 Crore. A1, his credit support officer, himself put their signatures and referred proposal and submitted to the same to the credit committee. The credit committee made endorsement while withdrawing the proposal for adhoc/drawings which was mentioned in Page No.2 of Ex.P41 i.e., resubmit the proposal after existing term loan is regularized, stop fresh

LCs, explore the possibility for additional collateral security. A1 did not bring to his notice regarding the above observations made by credit committee. He deposed in the cross examination that as per role manual (Ex.P41) Relationship Manager, Medium Enterprises is not under obligation to give information to branch concerned while they orally or in writing about the decisions taken by CCC. As per 1st page of Ex.P4, the decisions taken in CCC committee on 26.08.2011 were communicated to SBI, RBO on 09.09.2011. The copy of 1st page of

Ex.P4 was sent to Anaparthi branch. During cross examination by A2, he deposed that he do not know when Ex.P4 was sent to State Bank of

India, Anaparthi branch. As per the written arguments of A2, the communication of CCC was received by the branch on 14.09.2011. LC

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No.32 dated 13.09.2011 paid by the company on 26.12.2011 and the same was closed on 27.12.2011. The argument of A2 is that the bounden duty of A1 to monitor the day to day operation of accounts falling under his jurisdiction i.e., all accounts with limits of Rs.1 Crore or above in respect of branches SBE falling under RBO Kakinada. A1 should have monitor the LC account of A6 company in view of shortage of issue of further LCs. No.28, 30 and 32. A4 argued that the date of rejection of LCs is 09.09.2011. There is no communication regarding stoppage of LCs. The three LCs issued by branch officials were duly paid / recover. There is no loss to SBI on account of letter of credit.

236.As per the prosecution, there was an irregularity of Rs.1.51

Crores on account of non-retirement of four bills. The irregularity was on 22.08.2011. The RBO, Kakinada received the letter under Ex.P4 on 09.09.2011.

237. PW12 is Deputy Manager, State Bank of India, CCC

Kakinada deposed in his evidence that they received Ex.P4 on 09.09.2011 at RBO Kakinada and A1 made representation before the

CCC-II Hyderabad on 26.08.2011. Through this witness, Ex.P41 the correspondence relates to the proposal of sanction of adhoc limit of

Rs.1 Crore for a period of 45 days to A6. The proposal appraised by him and assessed and recommended by A1 and Regional Manager.

The committee has observed to stop issuing of fresh LCs. During cross examination, he deposed that the resolution of video conference

dated 26.08.2011 was withdrawn on some other conditions and the

same was orally informed to Regional Manager, Branch Manager by phone. On receipt of hard copy from CCC-II, the same will be sent to the Branch Manager for necessary compliance. On 09.09.2011 they received the hard copy. Either on the same day or next day they

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 140 forwarded the same to branch. During cross examination of A1 he deposed that under letter dated 27.09.2011, the Chief Manager

Anaparthi branch informed the Regional Manager RBO Kakinada that all the credit facilities of the unit are being regularized as on 27.09.2011. This was done after A1 letter dated 09.09.2011. The subject of the letter dated 27.09.2011 is sanction of adhoc limit of

Rs.100 lakhs, CC A/c No.30901617711. As per the entire evidence and prosecution case, A1 did not inform to branch office SBI Anaparthi branch to stop issuing of Lcs who monitoring the LC account of A6 company. Moreover, the letter received by the RBO Kakinada dated 09.09.2011 and as per the above arguments the branch received the communication on 14.09.2011. Before that A4, A7 and A2 established the LCs No.28, 30 and 32 on the request of A5 without waiting the orders from the CCC-II.

238.With regard to the transfer of funds from term loan Account

No.30725577979 to the current Account No.30637887824 of M/s VNR

Refineries Pvt Ltd., without obtaining bills in support of the payments made towards capital expenditure and invoices pertaining to the purchase of plant and machinery which was allowed by A4 and A3.

1st term loan was sanctioned on 14.03.2009 for limit of Rs.2.50 Crores.

An amount of Rs.18 lakhs was disbursed through Demand Draft on 28.03.2009 which was reflected in term loan account under Ex.P162 and the remaining amount was disbursed on various dates by credit into current A/c No. 30637887824 of M/s VNR Refineries Pvt Ltd.

The same was reflected in the Statement of Account furnished under part of Ex.P162 vide 30637887824 of M/s VNR Refineries Pvt

Ltd. The said disbursement was reflected as follows :

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 141 02.04.20095,00,000 07.04.20092,00,000 13.04.200916,00,000 02.05.20093,00,000 04.05.200912,00,000 15.05.200928,00,000 26.05.20093,00,000 04.06.20092,00,000 19.06.200917,00,000 01.07.200911,00,000 13.07.200930,00,000 21.07.200914,00,000 27.07.20099,00,000 01.08.20094,00,000 27.08.20094,50,000 14.08.20096,50,000

239.A3 argued that the loan was disbursed only after all the proper bills obtained the file containing these bills were maintained by Field

Officer ensuring that there was no diversion of funds and that the end use of funds was properly tracked for the term loan. The Bank

Engineer and Chartered Accountant both certified that the project was completed in all aspects. The Chartered Engineer certified value of the plant and machinery to be Rs.6.67 Crores as of November 3rd 2010.

But as per the entire evidence and record, no bills were available in the branch office SBI, Anaparthi.

240. Ex.P40 'A' Search report dated 30.03.2011 along with completion report given by K.V.Murali Mohan by certifying that the construction of civil work of A6 and construction was completed and fit

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 142 for occupation dated 26.11.2009 with photographs. Ex.P40 is the

Project report of A6. As per the disbursement above, A3 and A4 without obtaining bills, expenditure invoices for purchase of machinery they disbursed the amount to the current account of A6. The argument of A3 is that there is an internal audit in the bank relating to loans, but no defects found at the time of audit. A3 cannot take shelter of audit report, if really the bills and invoices are misplaced in the bank, no one prevented him to take steps to produce the bills from the suppliers who supplied the material.

241. During cross examination of PW19 (who is Clerk in A6 company) by A5 and A6, he deposed that after withdrawing the amounts covered by self cheques (as discussed above), he used to give the amount to Venugopala Rao, Manager Accounts and in turn he used to look after about the said amount and disbursed the said amount to payment of chemical charges, lorry freight charges, labour charges, salary payments, fuel charges and husk payments. It is not the case of A5 and A6, they produced the bills and invoices to the bank about the purchase of machinery for A6 company.

242.In respect of 2nd sanction of term loan was sanctioned for Rs.80 lakhs to A6 company vide A/c No.31071974662 on 25.02.2010 and the same was disbursed on the same date to the current account of VNR

Refineries Pvt. Ltd., which was reflected in current account statement of A6 which is part of Ex.P162. As per the evidence, A2, A4 and A7 allowed to transfer of funds to the current account of A6 from term loan account of A6 and disbursed the amount and failed to ensure the proper end use of the funds without obtaining bills and vouchers for purchase of plant and machinery.

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243.As per the discussed above, A2 to A4 and A7 being public servants allowed A5 and A6 for diversion of the funds and failed to ensure the proper end use of the funds from the loans sanctioned to

VNR Refineries Pvt Ltd/A6 without obtaining invoices and receipts and failed to comply the terms and conditions of the loans sanctioned by the CCC-II, Hyderabad.

244.A6 relied a judgment in Praveen @ Sonu Vs. The State of

Haryana, by the Hon'ble Supreme Court of India in Criminal

Appeal No.1571 of 2021 by the Hon'ble Justice Sri R. Subash

Reddy and Sri Krishikesh Roy.

"The Hon'ble Supreme Court reiterates that in the absence of any evidence to show meeting of minds between the conspirators for the intended object of committing an illegal act, it is not safe to hold a person guilty for the offences under Section 120-B of IPC." 2003 (1) ALD Crl 740 = M. Sree Ramulu Vs. State of AP held that "The guilt of Accused should be proved by prosecution on sound principles of unimpeachable evidence." 2015 (2) ALT Crl 47 = T.B.Shankar Rao and others Vs. The

CBI State of AP Rep. by its SPL PP for CBI held that "To prove the offence of cheating, there must be a dishonest intention from the time of inception and there be a strong evidence to shoe the same."

245.In this case on hand, there is substantial evidence forthcoming that there is a consensus between A1 to A7 to cheat the bank by adopting an illegal means which gives rise conclusive and irresistible

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 144 inference of agreement among them to defraud the State Bank of India and thereby caused wrongful loss to a tune of Rs.9,19,51,000/- to the

State Bank of India and wrongful gain. In view of the above discussion, this court is without any hesitation conclude that the offences punishable U/Sec.120-B and 420 IPC have been proved beyond all reasonable doubt against the Accused A1 to A7.

246. POINT NO.5 : Whether the prosecution has established

offence U/Sec.468 IPC and 471 of IPC against A1 to A7 beyond all

reasonable doubt ?

In this case on hand,

The charge U/Sec.468 of IPC framed against the Accused A1

to A7 against A1 to A7 that the forged certain documents ie.,

settlement deeds etc., intending that they shall be used for the

purpose of cheating to facilitate A6 represented by A5 in availing

credit facilities and exposed State Bank of India Anaparthi branch

for wrongful loss to the tune of Rs.9,19,51,000/-which is still

outstanding as on date on account of term loans 1 and 2 and

working capital etc.

The charge U/Sec.471 of IPC framed against the Accused

A1 to A7 as they fraudulently and dishonestly used the certain

documents which reasons to believe to be the forged documents

as genuine to obtain term loan, cash credit loan and letter of

credit from the State Bank of India and knew the said documents

to be forged and availed the loan amounts and transferred to the

account of A6.

Sec.468 of IPC - Forgery for the purpose of cheating :

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 145 "Whoever commits forgery, intending that forged shall be

used for the purpose of cheating, shall be punished with

imprisonment fo either description for a term which may extend to

seven years, and shall also be liable to fine."

The ingredients of Sec.471 of IPC, using a genuine a forged (document or electronic record) ...

"whoever fraudulently or dishonestly uses as genuine any document or electronic record which he knows or has reason to believe a forged document or electronic record shall be punishable in the same manner as if he had forged such

document or electronic record."

The essential ingredients of the offence U/Sec.471 of IPC in

view of the above mentioned provision of IPC are as follows :

(i) The Accused fraudulently or dishonestly used a document or electronic record as genuine ;

(ii) The Accused knew or had reason to believe

that the document or electronic record was a forged one;

As per the above inclusive provisions of Sec.471, it

is implicit to understand the definition of forgery as

provided under Sec.463 of IPC.

Sec.463 of IPC envisages forgery -- “whoever makes any false documents or

false electronic record or part of the document or

electronic record with intent to cause damage or

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 146

injury to the public or to any person, or to

support any claim or title, or to cause any person

to part with property, or to enter into any express

or implied contract, or with intent to commit fraud

or the fraud may be committed, commits forgery,

in order to constitute forgery, the first essential is

that the Accused should have made false

document and secondly such false document

must be made with an intent to cause damage or

injury to the public or to any class of public or

community. Reading together the provisions

U/Sec.462 and 461 IPC, an Accused can be

attributed with culpability if he uses any forged

document as genuine which he knows or has

reason to believe to a forged document or

record.”

In this case on hand, A1 to A7 were charged that they fraudulently and dishonestly used forged settlement deed dated 20.10.1949 executed by Nallamilli Venkanna and his sons in favour of

Karri Chandra Sekhara Reddy in respect of property to an extent of

Ac.07.20 cents agricultural land out of Ac.13.64 cents in S.No.173 at

Anaparthi under Ex.P20 as genuine document to obtain loan from

State Bank of India by knowing the document to be forged document.

In this case on hand, there is no evidence of prosecution for the offence U/Sec.468 and 471 IPC against A1 to A4 and A7.

A5 produced the settlement deed under Ex.P20 etc., towards collateral security for availing credit facilities and exposed State bank of

India, Anaparthi branch to wrongful loss to the tune of Rs.9,19,51,000/-

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 147 which is outstanding on account of term loan 1 and 2 and working capital etc.

247.It is evident on record as per the discussion covered in Point

No.2 supra, the prosecution adduced sufficient evidence to prove that the settlement deed under Ex.P20 is forged and fabricated document.

The Section clearly states that even only using for forged document intendedly shall be treated as similar as if the person has done the offence of forgery and shall be punished correspondingly. The intention as well as acts of the Accused are apparent enough to conclude the culpability of the Accused under this Section. The

Accused A5 and A6 are therefore, held guilty for the offence U/Sec.468 and 471 of IPC and the Accused A1 to A4 and A7 are not found guilty for the offence U/Sec.468 and 471 of IPC.

248. POINT NO.6 : Whether the prosecution has established

offence U/Sec.477-A IPC against A1 to A7 beyond all reasonable

doubt ?

Sec.477-A of IPC - falsification of accounts :

"Whoever being a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant, willfully, and with intent to defraud, destroys, alters, mutilates or falsifies any valuable security, or account which belongs to or is in the possession of his employer, or has been received by him for or on behalf of his employer, or willfully, and with intent to defraud, makes or abets the making of any false entry in, or omits or alters or abets the omission or alteration of any material particular from or in, any such valuable security or account, shall be punished with imprisonment of either description for a term which may extent to seven years, or with fine or with both."

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In this case on hand, the charge against A1 to A7 U/Sec.477-A of IPC, is that during the relevant point of time, they intend to defraud the State Bank of India, Anaparthi branch altered or falsified various documents and registers which were in their possession.

Inspite of voluminous allegations against the Accused A1 to A7, prosecution did not adduce any evidence specifying what are the specific documents falsified by the Accused. Accordingly, the charge

U/Sec.477-A of IPC against A1 to A7 in this case fails for want of merits.

249. POINT NO.7 :Whether the Accused A1 to A4 and A7 by disbursing the loan to A5 and A6 have intentionally and wantonly caused loss to the Bank and pecuniary advantage to A5 and A6 and thereby committed an offence punishable

U/Sec.13(1) (d) r/w 13 (2) of Prevention of Corruption Act, 1988 ?

A1 to A4 and A7 by illegal means and abusing official position as public servants dishonestly or fraudulently misappropriated or otherwise converted for their own use dishonestly disbursed the loans basing on fabricated documents submitted by A5 and A6 for term loan, cash credit loan and letter of credit.

A1 to A4 and A7 by corrupt or illegal means and by abusing their position as public servants obtained for themselves and for A5 and A6,

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 149 as a pecuniary advantage by sanctioning of term loan, cash credit loan and letter of credit to A5 and A6 and causing corresponding loss to

State Bank of India.

250.As per the Section 13 (1) - a public servant is said to commit the offence of criminal misconduct -

(c) If he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person to do so; or

(d)If he, (i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or

(ii)by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or

(iii) While holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest.

251. POINT NO.8 :

Coming to the above charge against A1 to A4 and A7 for the offence under PC Act, in view of the findings above against A1 to A4 and A7 in furtherance of criminal conspiracy in their official capacity as public servants, abused their position by causing wrongful gain to A5 and A6 and caused loss to the State Bank of India. The consequential

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 150 misconduct has been sufficiently proved against A1 to A4 and A7 and the provisions of Sec.13 (1) (d) r/w 13 (2) are proved.

252.In view of the above discussion, this Court is of the opinion that the prosecution has proved the charges for the offence punishable

U/Sec.120-B, 420 of IPC against A1 to A7 and the charges for the offence punishable U/Sec.468 and 471 of IPC against A5 and A6 and the charges for the offence punishable U/Sec.13 (1) (d) r/w 13 (2) of

Prevention of Corruption Act against A1 to A4 and A7.

With regard to the charge for the offence punishable U/Sec.477-

A IPC is not proved against A1 to A7.

With regard to the charge for the offence punishable U/Sec.468 and 471 of IPC is not proved against A1 to A4 and A7.

253. POINT NO.9 :

In the result,

1.Accused A1 to A4 and A7 are found guilty for the offences punishable U/Secs.120-B, 420 of IPC and U/Sec.13 (1) (d) r/w 13 (2) of

Prevention of Corruption Act and accordingly, they are convicted for the offence U/Sec.248 (2) Cr.P.C.

2.Accused A5 who is Managing Director of A6, and A6/VNR

Refineries Pvt. Ltd., are found guilty for the offences punishable

U/Secs.120-B, 420, 468 and 471 of IPC and accordingly, convicted for the offence U/Sec.248 (2) Cr.P.C.

3.Accused A1 to A7 are found not guilty for the offence punishable U/Sec.477-A of IPC and accordingly, they are acquitted for the offence U/Sec.248 (1) Cr.P.C.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 151

4.Accused A1 to A4 and A7 are found not guilty for the offences punishable U/Sec.468 and 471 of IPC and accordingly, they are acquitted for the offence U/Sec.248 (1) Cr.P.C.

Partly typed and partly dictated to the Stenographer Gr-I, transcribed by her, corrected and pronounced by me in the open Court, this the 17th day of April, 2026.

SD/- Smt.P.Vijaya Durga,

I ADDL. SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

254.The Accused A1 to A7 are individually questioned as regards the measure of sentence :

The 1st Accused represented that he is suffering with Spinal card problem and requested to take a lenient view.

The 2nd Accused represented that he is suffering with anxiety attack for the last 11 years and using tablets and requested to take a lenient view.

The 3rd Accused represented that he is suffering with Parkinson for the last 8 years and requested to take a lenient view.

The 4th Accused represented that he is suffering with anxiety and requested to take a lenient view.

The 5th Accused represented that he underwent Bypass surgery and suffering with Diabetes and requested to take a lenient view.

Heard authorized representative of A6/ VNR Refineries Pvt. Ltd., company.

The 7th Accused represented that he is suffering with BP,

Diabetes and Rationopathy problem and requested to take a lenient view.

Having regard to the nature of the case and offences perpetrated causing loss to the public money and in view of the precedential guidance of the Hon'ble Supreme Court, I deem that this is not a fit

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 152 case to extent the benefit of the benevolent provisions of the probation of offenders Act to any one of the Accused. Accordingly, Accused is sentenced as follows:

Accused A1 to A4 and A7 are sentenced to undergo simple imprisonment for a period of Three (3) years each and also to pay a fine amount of Rs.5,000/- (Rupees Five thousand only) each in default of payment of fine, to suffer simple imprisonment for a period of One month each for the offence under Sec.13 (1) (d) r/w 13 (2) of

Prevention of Corruption Act.

Accused A1 to A5 and A7 are sentenced to undergo simple imprisonment for a period of Two (2) years each and also to pay a fine amount of Rs.5,000/- (Rupees Five thousand only) each in default of payment of fine, to suffer simple imprisonment for a period of One month each for the offence under Sec. 120-B of IPC.

Accused No.1 to A5 and A7 are further sentenced to undergo simple imprisonment for a period of Two (2) years each and also to pay a fine amount of Rs. 5,000/- (Rupees Five thousand only) each in default of payment of fine, to suffer simple imprisonment for a period of

One month each for the offence under Sec.420 of IPC.

Accused A5 is further sentenced to undergo simple imprisonment for a period of Two (2) years each for the offences

U/Sec.468 and 471 of IPC and also to pay a fine amount of Rs.5,000/- (Rupees Five thousand only) for each offence, in default of payment of fine, to suffer simple imprisonment for a period of One month each.

Accused A6/ VNR Refineries Pvt. Ltd., is sentenced to pay a fine amount of Rs.5,000/- (Rupees Five thousand only) for each offence

U/Sec.120-B, 420, 468 and 471 of IPC.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 153

The substantive sentences imposed against A1 to A5 and A7 shall run concurrently and all Accused are entitled for set off if any, under Sec.428 Cr.PC.

It is stated that Accused was not arrested in this case.

Accused is informed about their right to prefer an appeal against this Judgment and availability of free legal aid. Free copy of this judgment supplied to them today i.e. 17.04.2026.

The bail bonds of all the Accused if any shall stands cancelled after expiry of appeal time.

Dictated to the Stenographer Gr-I, transcribed by her, corrected

and pronounced by me in the open Court, this the 17th day of April, 2026.

SD/- Smt.P.Vijaya Durga,SURTHY

I ADDL. SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

APPENDIX OF EVIDENCE

WITNESSES EXAMINED ON BEHALF OF PROSECUTION

Sl.No. Name of witness Description

P.W.1 Eswar Prasad Tiwari, Conducted investigation with (L.W.2)A.G.M., SBI, Local regard to accounts of Anaparthi Head OfficeBranch and verified accounts of M/s VNR Refineries Pvt. Ltd.

P.W.2 Y.V.S.S. Nageswara He furnished the information (L.W.14)Rao, Chief Manager, relating to Accounts to CBI on Corporate Central, 15.07.2013 and letters of Mumbai.point no.3confirmation for extension of mortgage by deposit of title deeds in respect of property of Smt.Mallidi Bullemmai and Mallidi Veera Raghava Reddy

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 154

P.W.3 B. Venkata Ramana, He gave a complaint to DIG, CBI (L.W.1)D.G.M., State Bank of dated 12.10.2012 basing on the India, Calicut.investigationreportdated 02.06.2012 submitted by Eswar Prasad Tiwari.

P.W.4 V.V.R. Subramanyam, Panel Advocate for State Bank of (L.W.28)AdvocateIndia, Anaparthi and he gave legal opinions dated 11.03.2008, 25.02.2009, 09.03.2009 and 23.12.2010.

P.W.5 R. Prabhu Kumar, Dy. He submitted Ex.P21 to Ex.P24 (L.W.13)Manager, State Bank to CBI. The said documents of India, Rasmec, belongs to loan sanctioned to Kakinada.Balagamreddy and others and Parvathi Parameswara Rice mill.

P.W.6 P. Rama Krishna, Panel Advocate of State Bank of (L.W.40)AdvocateIndia and submitted legal opinion underE4x.P25dated 30.05.2012.

P.W.7 C.R. Sashi Kumar, He issued the prosecution (L.W.42)Retired Deputy sanction order for A3 under Managing Director, Ex.P26 State Bank of India.

P.W.8 Vijay Jasuja, Rtd. He issued prosecution sanction (L.W.43)Chief General order for A1, A2 A4 and A7 under Manager, SBIEx.P27.

P.W.9 T.Viswamohan, Vice He spokes about the procedure (L.W.5)President, State Bank for sanctioning powers of of Indianetwork credit committee.

P.W.10 Mallidi Bullammai, Mother of A5 who executed the (L.W.21)Housewifegift deed dated 19.04.2007 in favour of M.V.Narayana Reddy and spokes about her signatures and signatures of her husband on the documents submitted to SBI, Anaparthi.

P.W.11 A.Vidyasagar, Rtd He spoken about the procedure (L.W.04)Chief Manager, State for sanction of limit and identified Bank of India.letter dated 14.03.2009 sent to

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 155

SBI, Anaparthi branch along with appraisal note.

P.W.12 Sri Alluri He spokes about the procedure (L.W.07)Atchutaramayya, Rtd.followed for processing the Employee of State proposals received at MERM Bank of Indiasales Hub and identified the proposal dated 14.12.2010.

P.W.13 J.V.Rama Krishnam He is the Junior Assistant in the Raju, Retired Sub-Registrar, Bikkavolu ad (L.W.15) Employeespoken about the genuineness of the documents No.124 of 1950 under Ex.P42.

P.W.14 O.Srinivasa Rao, VRO VRO of Mahindrawada and he (L.W.18)stated that he did not issue Ex.P18 to M.Veera Raghava.

P.W.15 V. Siva Prasad, Junior Asst. in the Sub-Registrar (L.W.17)Junior Assistant in Office, Rajanagaram. He Sub Registrar Officehandover the certain documents to CBI along with EC 1740 dated 22.12.2010 under seizure memo PW45.

P.W.16 Pampana Srinivasa VRO, Pandalapaka. He spoken Rao, V.R.O., Peddadathat no person by name Sri Karri (L.W.19) villageChandra Sekhara Reddy in Pandalapaka Village.

P.W.17 M.Eswara Reddy, He spokes that he offered the Paddy Commission land to an extent of Ac.3.11 1/2 (L.W.22) Agentcents of his wife as security for A7 in SBI, Anaparthi and stated that he never attended the board meetings and not signed in minutes.

P.W.18 T.Srinivasa Reddy, He is clerk in M/s Ayyappa Private clerkFinance and one of the Directors (L.W.20) of A6 and identified his signatures on documents relating to A6.

P.W.19 T.Venkata Sandeep Employee in PSR Traders and Reddy, Clerkalso worked in A6 company as a (L.W.25)

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 156 clerk and he used to attend the bank transactions of A6 at SBI, Anaparthi. He spoken about the cheques under Ex.P68 to Ex.P105.

P.W.20 V.Pragada Venkata He gave certificates dated Satyanarayana, 21.12.2010,01.12.2010, (L.W.26) Chartered Accountant24.02.2010 and 22.10.2010 which is part of Ex.P40 to A6 company as a Charted Accountant.

P.W.21 K.Venkata Murali Chief consulting Engineer cum Mohan, Panel valuerPanel Valuer and issued (L.W.27) Valuation Reports for A6 under Ex.P106 to Ex.P999.

P.W.22 M.Sai Baba, Asst. Chief Manager, SBI Regional General Manager, SBIOffice, Rajahmundry and he (L.W.30) given Ex.P112 covering to CBI Visakhapatnam along with manual on loans and advances.

P.W.23 G.Suchitra Kumar, He identified the signatures of TypistPW4 on Ex.P15, Ex.P19 and (L.W.31) Ex.P46 and Ex.P47.

P.W.24 Bandaru Chalamaji, Deputy Manager Desk Officer, Chief Manager, SBI, SBI and he furnished the (L.W.32) LDdocuments to CBI under covering letter Ex.P113

P.W.25 A.Srinivas, VRO, VRO of Anaparthi who spoken Korukondaabout Ex.P45 and Ex.P115. (L.W.33)

P.W.26 A.Sunandasri, Sub Sub-Registrar, Draksharama and Registrar, Alamurufurnished the Ex.P116 to CBI (L.W.34) Visakhapatnam and spoken about the documents under Ex.P38 and Ex.P116.

P.W.27 G.Aruna, Housewife He spoken about the property Ac.0.74 cents in S.No.173 (L.W.35) situated at Anaparthi received fromhermotherKarri

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 157

Varalakshmi towards Stridhana at the time of marriage and spoken about the person in whose photograph appeared in Ex.P49.

P.W.28 Karri Subba Reddy, He also spoken about the Cultivationphotographs affixed in Ex.P49. (L.W.36)

P.W.29 T.Chandra Reddy, He spoken about the lands Cultivationpurchased by his father Late (L.W.37) Bullaiah and his brothers in S.No.173, Anaparthi.

P.W.30 K.S.Gowri Kumari, Panchayat secretary and issued Panchayat Secretary the Death Certificate of Mallidi (L.W.39) Veera Raghava Reddy under Ex.P117.

P.W.31 K.V.K.K.S.Sarma, Asst. General Manager, SBI, (L.W.6)Asst. General Hyderabad and spoken about Manager, State Bank the procedure for sanction of of India, Hyderabadlimits and his evidence corroborated the evidence of PW9.

P.W.32 B.Satyanandam, Asst.Asst.GeneralManager, General Manager, Visakhapatnam and he furnished (L.W.10) SME Centre,Ex.P120 to Ex.P176 and some of Visakhapatnamthe exhibits to CBI.

P.W.33 J.Chandrasekharam, He spoken about the duties and Retired AGM, SBIresponsibilities of RMME. (L.W.9)

P.W.34 L.Venkata Naveen, Dy.Manager, SBI and he spoken Deputy Manager, about the signatures of A1 and (L.W.11) State Bank of India, A7 on Ex.P3 and Ex.P45 and Dondaparthy Branch, Ex.P147 and Ex.P125, Ex.P142 Visakhapatnamand Ex.P123.

P.W.35 Mr.B.S.N.Pandu Charted Accountant and he Ranga Murthy, verified the documents pertaining (L.W.41) Chartered Accountantto M/s VNR Refineries PVT. Ltd., on the request of SBI, Anaparthi in they ear 2011.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 158

P.W.36 Mr.D.Ashok Branch Manager, SBI and he Chakravarthi, Branch acted as witness at the time of (L.W.45) Manager, SBI, Kavitiobtaining specimen signatures of PW14, PW17, PW18 and LW23by CBI officials.

P.W.37 Mr.M. Kameswara He is the Bank Officer, Bank of Rao, Retired India and he acted as a witness (L.W.47) Employeeat the time of obtaining specimen signatures of PW10 under Ex.P37 by CBI.

P.W.38 Mr.D.Nageswara Rao,BranchManager,United Retired EmployeeInsurancecompany, (L.W.46) Visakhapatnam and he acted as a witness at the time of obtaining specimen signatures of CBI under Ex.P178.

P.W.39 P. Venugopala Rao, ScientificEx,pert,CFSL Asst. Director and Hyderabad who gave opinion (L.W.49) Scientist-C, CFSLunder Ex.P179.

P.W.40 Sushanth Kumar He furnished the documents to Singh, Asst. General CBIinconnectionwith (L.W.12) Manager, S.B.I.investigation relating to M/s VNR refineries under covering letter Ex.P180.

P.W.41 Ch.V.Narendra Deve, Investigation Officer. Addl. S.P., CBI, ACB (L.W.44)

WITNESSES EXAMINED ON BEHALF OF DEFENCE

NIL

LIST OF DOCUMENTS MARKED ON BEHALF OF PROSECUTION

Exhibit No. Description of the Exhibit Proved by/Attested by

Ex.P.1 Sanction orderPW1 (LD 17)

Ex.P.2 (LD 25)Approval orderPW1

Ex.P.3 (LD 53)ApprovalProceedings PW1

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Dt.21.12.2010 of Circle Credit Committee – II, L.H.O., Hyderabad.

Ex.P.4 (LD 245)Refusal of Adhoc C.C.Limit forPW1 Rs. 1 Crore.

Ex.P.5 (LD 2)Investigation report of PW1PW1

Ex.P.6(LD 242)Letter of PW2 Dt.15.07.2013PW2 alongwithdocuments submitted by PW2 to CBI.

Ex.P.7Complaint given by PW3 toPW3

CBI.

Ex.P.8(LD 240)Inspection Report submitted byPW3 A.1 (Marked during the course of cross-examination on behalf of A.1).

Ex.P.9(LD 9)Copy of legal opinion of PW4PW4 relates to vacant site (Original is filed in C.C.36/2014).

Ex.P.10(LD 10) -Photostat copy of RegisteredPW4 Settlement Deed Dt.19.04.2007 (Originalisfiledin C.C.36/2014).

Ex.P.11(LD 11) - Photostat copy of RegisteredPW4 Sale Deed Dt.06.05.1996 (Originalisfiledin C.C.36/2014).

Ex.P.12 (LD 13) - legal opinion of PW4 pertainingPW4 to Ac.3.01 ½ Cents of land in VemulapalliVillageof Mandapeta Mandal.

Ex.P.13 (LD 14) -True Copy of Registered SalePW4 Deed Dt.06.10.2008.

Ex.P.14 (LD 15) - True Copy of Registered SalePW4 Deed Dt.18.12.2008.

Ex.P.15(LD 59) - Legal opinion of PW4 relating PW4

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 160 to the property of Mallidi Veera Raghava Reddy for Ac.1.53 Cents in Ramavaram Village of Anaparthy Mandal.

Ex.P.16(LD 60) - Original Registered Sale DeedPW4 Dt.30.01.2003.

Ex.P.17 (LD 62) - E.C. from 2005-2009 relating toPW4 item no.5 of PW4 opinion.

Ex.P.18(LD 61) - Certificate issued by V.R.O.,PW4 Ramavaram relating to item no.4 of opinion of PW4.

Ex.P.19 (LD 79) - legal opinion relating to thePW4 property of Karri Chandra Sekhar Reddy.

Ex.P.20(LD 80) - Original Registered SettlementPW4 Deed Dt.20.10.1949.

Ex.P.21(LD 241) TruecopyofLetterPW5 Dt.25.04.2013 addressed by Chief Manager to Inspector of Police CBI

Ex.P.22 (LD 241) Photostat Copy of RegisteredPW5 Sale Deed Dt.06.05.1996 (Marked subject to objection since it is a Photostat Copy).

Ex.P-23 (LD 241) Photostat Copy of Sale DeedPW5 Dt.16.10.1995 (Marked subject to objection since it is a Photostat Copy).

Ex.P-24 (LD 241) Photostat Copy of Small ScalePW5 Industries/SmallBusiness Finance/C & I/A.G.C.L. Finance extract (Marked subject to objection since it is a Photostat Copy).

Ex.P-25 (LD 65) Legal opinion of PW6,PW6 Dt.30.05.2012.

Ex.P-26 (LD 256) Prosecution Sanction Order forPW7 A.3.

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Ex.P-27 (LD 257) Prosecution sanction order toPW8 prosecute A1, A2, A4 and A7 along with State Bank of India officers Service Rules.

Ex.P-28 (LD 3) -Certificate of incorporation ofPW9 A6 (LD No.3)

Ex.P-29 (LD 88) Letter dt.24.09.2009 from StatePW9 Bank of India, Anaparthy to Chief Manager, Credit Processing Cell, State Bank of India,ZonalOffice, Visakhapatnam.

Ex.P-30 (LD 87) Letter from A6 to the Branch PW9 Manager, State Bank of India, Anaparthy dt.30.12.2008 (LD No.87).

Ex.P-31 (LD 26) LetterofarrangementPW9 dt.25.02.2010.

Ex.P-32 (LD 86) Letter dt.06.11.2009 from StatePW9 BankofIndia,CPC, Visakhapatnam to State Bank of India, Anaparthy branch.

Ex.P-33 (LD 21) Signature of PW10 on letter ofPW10 confirmation for creation of mortgage by deposit of title deedsdocument(only signature portion is marked).

Ex.P-34 (LD 54)- Signature of PW10 at pagePW10 No.09 of letter of arrangement (only signature portion is marked).

Ex.P-35 (LD 51)- Signature of PW10 onPW10 confirmation for extension of mortgage by deposit of title deeds document dt.20.10.2010 (only signature portion is marked).

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 162

Ex.P-36Signature of PW10 onPW10 supplemental agreement of loan-cum-hypothecation document (only signature portion is marked).

Ex.P-37 (LD 254) Specimen signatures of PW10. PW10

Ex.P-38 (LD 67)- Sale deeddt.23.03.2007PW10 executed by PW10 husband in her favour.

PW12 Ex.P-39 (LD 86)Letter from State Bank of India, Anaparthy to Asst. General Manager, Regional Business Office, Kakinada dt. NIL.

PW12 Ex.P-40 (LD 84) Project report of A6 (LD No.84 from pages 837 to 865).

PW35 Ex.P-40-ASearchreportdated 30.03.2011alongwith (LD 84) connected annexure part of Ex.P.40 (3 sheets)

PW12 Ex.P-41 (LD 90)Letter dt.18.11.2013 from State Bank of India, Local Head Office, Hyderabad to CBI, Visakhapatnam along with correspondence.

PW13 Ex.P-42 (LD 237) Registrationextractof document No.124/1950.

PW13 Ex.P-43Certificate of encumbrance bearing No.1042 along with (LD 237a) letter dt.25.04.2013.

PW14 Ex.P-44 (LD 255) Specimen signatures of PW14 and hand writing.

PW15 Ex.P-45 (LD 238) Seizure memo dt.26.10.2013 with regard to handing over of certain documents to CBI along

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 163 withE.C.No.1740 dt.22.12.2010.

PW15 Ex.P-46(LD 93)Letter dt.10.06.2013 from Sub Registrar, Anaparthy to CBI along with attested copy of application for E.C. (marked subject to objection)

PW15 Ex.P-47(LD 243) Letter dt.11.11.2013 from Sub Registrar, Anaparthy to CBI along with attested copy of application for E.C. (marked subject to objection)

PW15 Ex.P-48(LD 91) Letter dt.6.6.2013 from Sub Registrar, Anaparthy to CBI by handing over attested copies of E.Cs and attested copy of registeredsaledeed dt.30.01.2003 and attested copy of registered sale deed dt.19.04.2007.(marked subject to objection)

PW16 Ex.P-49(LD 82) Photostat copy of S.S.L.No.4 of SBI,Anaparthybranch. (marked subject to objection raised by learned counsel for A5 and A6)

PW17 Ex.P-50 (LD 18)Agreementofloan-cum- hypothecation.

PW17 Ex.P-51 (LD 22)Letter of confirmation for creation of mortgage by deposit of title deeds.

PW17 Ex.P-52 (LD 27)Guarantee agreement.

Letter of confirmation forPW17 Ex.P-53 (LD 41) extension of mortgage by deposit of title deeds.

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Letter of confirmation forPW17 Ex.P-54 (LD 42) extension of mortgage by deposit of title deeds.

Letter of confirmation forPW17 Ex.P-55 (LD 50) extension of mortgage by deposit of title deeds.

Guarantee agreement.PW17 Ex.P-56 (LD 55)

Supplemental agreement ofPW17 Ex.P-57 (LD 56) loan-cum-hypothecation

Ex.P-58 (LD 33) Letter of confirmation forPW17 extension of mortgage by deposit of title deeds.

Letter of confirmation forPW17 Ex.P-59 (LD 40) extension of mortgage by deposit of title deeds.

Ex.P-60 (LD 251) Specimen signatures of PW17. PW17

Ex.P-61 (LD 252)SpecimensignaturesofPW17 PW17’s wife.

PW18 Ex.P-62 (LD 23)Letter of confirmation for creation of mortgage by deposit of title deeds.

Letter of confirmation forPW18 Ex.P-63 (LD 37) extensionofmortgage, dt.26.2.2010.

Ex.P-64 (LD 48) Letter of confirmation forPW18 extensionofmortgage, dt.26.10.2010.

Letter of confirmation forPW18 Ex.P-65 (LD 38) extensionofmortgage, dt.26.2.2010.

Registered family settlementPW18 Ex.P-66 (LD 7) deed, dt.18.12.2008.

Ex.P-67 (LD 250) Specimen signatures of PW18. PW18

Ex.P-68 (LD 125) Cheque given by A-6 for PW19

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Rs.18,56,300/-,dated 21.05.2010.

PW19 Ex.P-69 (LD 127) Cheque given by A-6 for Rs.18,56,300/-,dated 22.05.2010.

PW19 Ex.P-70 (LD 148) Cheque given by A-6 for Rs.34,00,050/-,dated 24.12.2010.

PW19 Ex.P-71 (LD 150) Cheque given by A-6 for Rs.43,00,050/-,dated 24.12.2010.

PW19 Ex.P-72 (LD 152) Cheque given by A-6 for Rs.37,66,850/-,dated 24.12.2010.

PW19 Ex.P-73 (LD 156) Cheque given by A-6 for Rs.5,58,013/-,dated 24.12.2010.

PW19 Ex.P-74 (LD 159) Cheque given by A-6 for Rs.17,56,916/-,dated 31.12.2010.

PW19 Ex.P-75 (LD 155) Cheque given by A-6 for Rs.10,00,000/-,dated 24.12.2010 (self cheque).

PW19 Ex.P-76 (LD 164) Cheque given by A-6 for Rs.27,00,000/-,dated 10.01.2011 (self cheque).

PW19 Ex.P-77 (LD 170) Cheque given by A-6 for Rs.4,00,000/-,dated 26.02.2011 (self cheque).

PW19 Ex.P-78 (LD 172) Cheque given by A-6 for Rs.27,80,282/-,dated 11.03.2011.

PW19 Ex.P-79 (LD 173) RTGS remittance slip dated 10.03.2011.

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PW19 Ex.P-80 (LD 174) Cheque given by A-6 for Rs.20,00,050/-,dated 19.04.2011.

PW19 Ex.P-81 (LD 176) Cheque given by A-6 for Rs.9,00,050/-,dated 30.04.2011.

PW19 Ex.P-82 (LD 177) RTGS remittance slip dated 30.04.2011.

PW19 Ex.P-83 (LD 178) Cheque given by A-6 for Rs.27,00,050/-,dated 13.05.2011.

PW19 Ex.P-84 (LD 180) Cheque given by A-6 for Rs.27,33,224/-,dated 13.05.2011.

PW19 Ex.P-85 (LD 182) Cheque given by A-6 for Rs.18,00,050/-,dated 13.05.2011.

PW19 Ex.P-86 (LD 189) Cheque given by A-6 for Rs.22,50,050/-,dated 18.05.2011.

PW19 Ex.P-87 (LD 191) Cheque given by A-6 for Rs.5,10,326/-,dated 18-05-2011.

PW19 Ex.P-88 (LD 193) Cheque given by A-6 for Rs.9,14,710/-,dated 19.05.2011.

PW19 Ex.P-89 (LD 195) Cheque given by A-6 for Rs.17,00,050/-,dated 19-05-2011.

PW19 Ex.P-90 (LD 197) Cheque given by A-6 for Rs.10,13,682/-,dated 19-05-2011.

PW19 Ex.P-91 (LD 203) Cheque given by A-6 for Rs.3,08,955/-,dated

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 167 23-05-2011.

PW19 Ex.P-92 (LD 205) Cheque given by A-6 for Rs.3,00,000/-,dated 23-05-2011.

PW19 Ex.P-93 (LD 207) RTGS remittance slip dated 23.05.2011.

PW19 Ex.P-94 (LD 208) Cheque given by A-6 for Rs.27,00,050/-,dated 11-06-2011.

PW19 Ex.P-95 (LD 210) RTGS remittance slip dated 13.06.2011.

PW19 Ex.P-96 (LD 211) RTGS remittance slip for Rs.9,04,478/-,dated 14-06-2011.

PW19 Ex.P-97 (LD 212) RTGS remittance slip dated 14.06.2011.

PW19 Ex.P-98 (LD 214) RTGS remittance slip dated 16.06.2011.

PW19 Ex.P-99 (LD 216) RTGS remittance slip dated 27.06.2011.

PW19 Ex.P-100Cheque given by A-6 for Rs.20,00,050/-,dated (LD 217) 22-09-2011.

Ex.P.101Cheque given by A-6 forPW19 (LD 219) Rs.16,00,050/-,dated 23-09-2011.

Ex.P.102RTGS remittance slip datedPW19 (LD 222)27.09.2011.

Ex.P.103Cheque given by A-6 forPW19 (LD 221)Rs.1,00,000/-,dated 24-09-2011.

Ex.P.104Cheque given by A-6 forPW19 (LD 224)Rs.16,00,000/-,dated 29-09-2011 (self).

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Ex.P.105Cheque given by A-6 forPW19 (LD 225)Rs.4,58,335/-,dated 29.09.2011.

Ex.P.106Valuation report, dt.21.12.2010 PW21 (LD 81)

Ex.P.107Valuation report, dt.20.12.2008 PW21 (LD 64)

Ex.P.108Valuation report, dt.20.12.2008. PW21 (LD 69)

Ex.P.109Valuation report, dt.20.12.2008. PW21 (LD 72)

Ex.P.110Valuation report, dt.04.02.2009 PW21 (LD 16)

Ex.P.111Valuation report, dt.20.12.2008. PW21 (LD 8)

Ex.P.112Covering letter of PW22 to CBI,PW22 (LD 5)Visakhapatnam along with copies of manual on loans and advances, credit management- generalinstructions(few pages), part-I&II, attested by him, besides “e” circular, dt.02.09.2010.

Ex.P.113Covering letter from ChiefPW24 (LD 249)Manager,Visakhapatnam Administrative office, SBI to CBI, Visakhapatnam along with sanctioned copies of loan pertain to A-6 company.

Ex.P.114Letter addressed by PW25 toPW25 (LD 239)CBI, dt.18.12.2013 along with copy of proceedings of District Collector to show that T.Subba Rao retired on 30.06.2009.

Ex.P.115Land revenue record relating toPW25 (LD 247)S.No.173 of Anaparthy village including M.R.O. report, R.I. report and report of PW25.

Ex.P.116True extract of registered PW26

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 169 (LD 248) settlement deed, dt.23.03.2007 executed by Mallidi Veera Raghava Reddy in favour of his wife (PW.10) along with receipt memo dt.20.12.2013 (marked subject to objection).

Ex.P.117Certificate of death of MallidiPW30 (LD 246) Veera Raghava Reddy, S/o Subbi Reddy of Ramavaram village given by her on 05.12.2013.

Ex.P.118Letter of request submitted byPW31 (LD 88) A6 Company to the Branch Manager, State Bank of India, Anaparthi.

Ex.P.119Letter dated 18.11.2009 writtenPW31 (LD 87) by A6 Company to Branch Manager, S.B.I., Anaparthi.

Ex.P.120(LD 4) -ReceiptmemodatedPW32 (part of L.D.4)08.12.2012 under cover of which PW32 handed over the documents mentioned in said memo.

Ex.P.121(LD 4) -ReceiptmemodatedPW32 (part of L.D.4)08.12.2012 under cover of which PW32 handed over the documents mentioned in said memo.

Ex.P.122 (LD 6)Legal opinion file consisting ofPW32 8 sheets given by Sri V.V.R. Subrahmanyam, the Panel Advocate of State Bank of India, Anaparthi.

Ex.P-123RegistrationextractofPW32 (LD 12) documentbearing No.454/1994,dated 24.03.1994.

Ex.P-124Memorandum for recordingPW32 (LD 19)creation of mortgage by deposit of title deeds (SME-5), dated

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 170 26.03.2009.

Ex.P-125Memorandum for recordingPW32 (LD 29) extension of mortgage by deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

expanding limits and enhanced limits and additional facilities (SME-7), dated 25.02.2010.

Ex.P-126Letter of confirmation forPW32 (LD 30)extension of mortgage by deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010.

Ex.P-127Letter of confirmation for (LD 31)extension of mortgage byPW32 deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010.

Ex.P-128Letter of confirmation forPW32 (LD 32)extension of mortgage by deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010 given by

V.Rajyalakshmi.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 171

Ex.P-129Letter of confirmation forPW32 (LD 34) -extension of mortgage by deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010 given by

V.Bhuvan Kumar.

Ex.P-130Letter of confirmation forPW32 (LD 20) creation of mortgage by deposit of title deeds given by M.VenkatanarayanaReddy (SME-6), dated 30.03.2009.

Ex.P-131Letter of confirmation forPW32 (LD 24) creation of mortgage by deposit of title deeds given by V.Rajyalakshmi (SME-6), dated 30.03.2009.

Ex.P-132Letter of confirmation forPW32 (LD 35) extension of mortgage by deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010 given by

V.Akshay.

PW32 Ex.P-133Letter of confirmation for extension of mortgage by (LD 36) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 172

dated 26.02.2010 given by

V.Rajyalakshmi.

PW32 Ex.P-134Letter of confirmation for extension of mortgage by (LD 39) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010 given by

M.Veera Raghava Reddy.

PW32 Ex.P-135Letter of confirmation for extension of mortgage by (LD 43) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010 given by

M.Bullamai.

PW32 Ex.P-136Letter of confirmation for extension of mortgage by (LD 44) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010 given by

M.Bullamai (in respect of her another property).

PW32 Ex.P-137Letter of confirmation for extension of mortgage by (LD 45) deposit of title deeds covering

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 173 enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010 given by

V.Bhavan Kumar.

PW32 Ex.P-138Letter of confirmation for extension of mortgage by (LD 46) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 26.02.2010 given by

V.S.R.Akshay.

PW32 Ex.P-139 Letter of confirmation for extension of mortgage by (LD 47) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 20.10.2010 given by

MallidiVenkatanarayana Reddy.

PW32 Ex.P-140 Letter of confirmation for extension of mortgage by (LD 49) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 174

dated 20.10.2010 given by

Mallidi Veera Raghava Reddy.

PW32 Ex.P-141Letter of confirmation fPW32or extension of mortgage by (LD 52) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

securing the existing limits and/or enhanced limits and

additional facilities (SME-8),

dated 20.10.2010 given by

V.S.R.Akshay.

PW32 Ex.P-142Memorandum for recording creation of mortgage by deposit (LD 57) of title deeds (SME-5), Dt.24.12.2010 given by M/s V.N.R. Refineries Pvt. Ltd.

PW32 Ex.P-143Memorandum for recording extension of mortgage by (LD 58) deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on

additionalpropertiesfor

expanding limits and enhanced limits and additional facilities (SME-7), dated 24.12.2010 given M/s V.N.R. Refineries Pvt. Ltd.

PW32 Ex.P-144 EncumbranceCertificates

dated 29.06.2012 seven in

(LD 63) number.

PW32 Ex.P-145 Legal opinion file consisting of 8 sheets given by Sri V.V.R. (LD 66) Subrahmanyam, the Panel advocate of State Bank of India,Anaparthidated 12.01.2009.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 175

PW32 Ex.P-146Photostat copy of registered sale deed bearing document (LD 68) No.2559/1995,dated 16.10.1995.

PW32 Ex.P-147Legal opinion file consisting of 9 sheets given by Sri V.V.R. (LD 70) Subrahmanyam, the Panel advocate of State Bank of India,Anaparthidated 12.01.2009.

PW32 Ex.P-148Original registered Gift Deed bearingdocumentNo. (LD 71) 4579/2004 dated 30.08.2004.

PW32 Ex.P-149Legal opinion file consisting of 8 sheets given by Sri V.V.R. (LD 73) Subrahmanyam, the Panel advocate of State Bank of India,Anaparthidated 03.02.2009.

PW32 Ex.P-150Photostat copy of Gift Settlement Deed bearing (LD 74) No.544/2009,dated 30.01.2009.

PW32 Ex.P-151 ValuationReportdated 04.02.2009givenby (LD 75) DhanapathiRaoand Associates.

PW32 Ex.P-152Legal opinion file consisting of 9 sheets given by Sri V.V.R. (LD 76) Subrahmanyam, the Panel advocate of State Bank of India,Anaparthidated 03.02.2009.

PW32 Ex.P-153 Certified copy of registered Sale Deed bearing Document (LD 77) No.5151/2001,dated 12.07.2001.

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PW32 Ex.P-154Photostat copy of Valuation Certificate dated 19.12.2008 (LD 78) given by Dhanapathi Rao and Associates.

PW32 Ex.P-155Affidavits and statements of personal assets and liabilities (LD 83) of the Directors of A6 company V.N.R.Refineries Pvt. Ltd. namelyMallidiVenkata narayana Reddy (A5), Mallidi Bulliammayi, Tetali Srinivasa Reddy, Mallidi Eswara Reddy, Vatturi Bhavan Kumar, Vatturi S.R.Akshay, Mallidi Sunitha and Vatturi Rajyalakshmi.

PW32 Ex.P-156Unit inspection report of A6 company. (LD 85)

PW32 Ex.P-157Three notices dated 01.11.2011 and 12.01.2011 issued by bank (LD 87) to A6 company.

PW32 Ex.P-1582nd Annual report for the years 2009-2010 submitted by A6 (LD 89) company to the bank.

PW32 Ex.P-159Attested copy of registered sale deed,dated18.12.2008 (LD 92) bearing No.2049/2008.

PW32 Ex.P-160 Statement of account of A5. (LD 94)

PW32 Ex.P-161Coveringletterdated 24.08.2013 under the cover of (LD 94) which Ex.P.160 was furnished to C.B.I. Officer.

PW32 Ex.P-162 File containing photocopy of original application, term loan (LD 95) application, board resolutions, lettersforenhancement,

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 177

C.C.enhancement application, letter by M.E.R.M for renewal, letter to S.B.I., Anaparthi for renewal of C.C., confirmation of share capital letter, E.M. Register pages, statements of accounts pertaining to account bearingNos.30637887824, 31071974662, 31886600770, 30725577979, 30901617711, 31093069010.

PW32 Ex.P-163Coveringletterdated 23.05.2013 under cover of (LD 95) which Ex.P.162 file was furnished to C.B.I. Inspector.

PW32 Ex.P-164 Statement of account of A6 company account bearing (LD 96) No.30637887824 for the period from 01.04.2010 to 04.02.2013 along with Certificate U/Sec.2-A of Bankers’ Book Evidence Act, 1891.

PW32 Ex.P-165 Photostat copy of E.M.Register pertaining to Housing loan of (LD 97) A5.

PW32 Ex.P-166Bunch of original cheques and vouchers pertaining to A6 (LD 99) company.

PW32 Ex.P-167 Letter dated 15.07.2013 under cover of which Ex.P.166 (LD 98) cheques and vouchers are furnished to C.B.I. Inspector.

PW32 Ex.P-168 Statement of account of A6 company account bearing (LD 96) No.30901617711 for the period from 23.09.2009 to 05.06.2009.

Letter dated 05.06.2013 under PW32 Ex.P-169

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 178 (LD 96) the cover of which Exs.P.164 and P.168 are furnished to C.B.I. Inspector.

PW32 Ex.P-170Statementofaccount pertaining to Savings Bank (LD 233) account of A5 bearing No.10786575935 along with CertificateU/Sec.2-Aof Bankers’ Book Evidence Act, 1891. Ex.P.170 is signed by PW32.

PW32 Ex.P-171Bunch of cheques and vouchers of A6 company along (LD 234) with list of vouchers.

PW32 Ex.P-172Letter dated 21.10.2013 under the cover of which Ex.P.171 (LD 234) bunch of cheques and vouchers of A6 company were handed over to Inspector of police, C.B.I., Visakhapatnam.

PW32 Ex.P-173Original cash credit register for the period from 26.03.2007 to (LD 235) 30.05.2011 containing 90 folios. The entries pertaining to A6 company are mentioned in page Nos.39, 62 and 71.

PW32 Ex.P-174 Receipt memo under cover of which Ex.P.173 was handed over to Inspector of police, C.B.I., Visakhapatnam.

PW32 Ex.P-175Copy of letter of credit register of A6 company. (LD 236)

PW32 Ex.P-176 Letter dated 16.11.2013 under cover of which Ex.P.175 was (LD 236) handed over to Inspector of police, C.B.I., Visakhapatnam.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 179

PW32 Ex.P-177 Letter dated 18.11.2013 in which the particulars of the (LD 244) properties of A6 company sold by bank are mentioned.

PW38 Ex.P-178 Specimen signatures/ hand writings/ alphabets/ numerical (LD 253) in 9 sheets covered under LD.253.

PW39 gave opinion on thePW39 Ex.P-179 documentsrelatedto (LD 258)

R.C.9(A)/2013, CBI/ ACB,

Visakhapatnam.

PW40 Ex.P-180 Covering letter addressed to Inspector, CBI. (LD 240)

PW40 Ex.P-181 Pre-sanction inspection report dt.19-10-2010 prepared by (LD 240) RMME.

PW40 Ex.P-182Letter dt.02-02-2011 addressed to AGM by the Branch Manager (LD 240) in connection with information relating to VNR Refineries.

PW40 Ex.P-183 Letter dt.10-08-2011 addressed to Regional Manager, Kakinada (LD 240) by the Branch Manager in connection with VNR Refineries Pvt. Ltd., for a proposal of one crore as adhoc limit along with a request letter dt.22-08-2011 of the borrower.

PW40 Ex.P-184 Letter dt.27-09-2011 addressed to Regional Manager, Kakinada (LD 240) by the Chief Manager advising the position of accounts pertaining to VNR Refineries Pvt. Ltd.,

Another inspection report PW40 Ex.P-185

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 180 (LD 240) dt.18.01.2012 prepared by the Relationship Manager (M.E) (3 sheets – excluding note dt.10.02.2012).

PW40 Ex.P-186 Note dt.10.02.2012 among AGM, Venkanna Babu and new (LD 240) promoters regarding change of directors for VNR Refineries Pvt. Ltd., (marked subject to objection raised by learned counsel for accused that the document does not contain seal or signatures).

SBI Sales Hub-RBO-KakinadaPW40 Ex.P-187 Unit Inspection report (noted as (LD 240) sheet No.10 of L.D.240). (Ex.P-187 is marked subject to objection raised by learned counsel for Accused that it is a photostat copy).

PW41 Ex.P-188 FIR against K.Satyanarayana, the then Relationship Manager, SBI; Ch.Chalapathi Rao, the then Branch Manager, SBI, Anaparthi; N.V.Ramana Rao, the then Branch Manager, SBI, Anaparthi; M.Ramana Rao, the then Asst. Manager, SBI, Anaparthi; Pramod Kumar, the then Asst. Manager, SBI, Anaparthi; Mallidi Venkata Narayana Reddy @ Venkanna Babu, Managing Director, M/s V.N.R.Refineries Pvt. Ltd., RamavaramVillageand unknown bank officials and private persons.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 181

LIST OF DOCUMENTS MARKED ON BEHALF OF DEFENCE

Exhibit No. Description of the Exhibit Proved by/Attested by

Ex.D.1 Contradiction portion fromPW13 161 CrPC statement of PW13

Ex.D.2 Contradiction portion fromPW24 161 CrPC statement of PW24

SD/- Smt.P.Vijaya Durga,

I ADDL. SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

Copy submitted to

The Hon’ble Registrar (Judicial), High Court of Andhra Pradesh,

Amaravathi.

Copies to:

(1) The Accused (2) The Inspector of Police, C.B.I., Visakhapatnam through Public Prosecutor.

//True Copy//

I ADDL. SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 182

CALENDAR AND JUDGMENT

IN THE COURT OF THE I ADDL. SPECIAL JUDGE FOR C.B.I.

CASES, VISAKHAPATNAM.

Present: Smt.P.Vijaya Durga, I Addl.Special Judge for C.B.I. Cases, Visakhapatnam.

Friday, this the 17 th day of April, 2026

C.C.No.32/2014

RC.No.09(A)/2012/CBI-VSP

Date of offence : During 2008-2011

Date of report or complaint : 12.10.2012

Date of apprehension of accused: Not arrested

Date of release on bail : Not applicable

Date of commencement of trial: 22.08.2017

Date of close of trial : 29.07.2024

Date of sentence or order: 17.04.2026

Explanation of delay and remarks:

This case was taken on file on 09.09.2014against the A1 to A7 and made over to II Addl. Special Judge’s Court for CBI Cases,

Visakhapatnam. Subsequently the said Court was shifted to

Vijayawada vide orders in ROC No.48/E1/2019 dated 28.09.2022 of

Hon’ble High Court of A.P. and on the ground of jurisdiction as per

G.O.Ms.No.09 dated 09.01.2020 the case in C.C.No.32/2014 was transferred to Principal Special Judge’s Court for CBI Cases,

Visakhapatnam and later to this Court. The examination of witnesses was commenced on 22.08.2017.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 183

On behalf of the prosecution, P.W.1 to PW41 were examined and Ex.P1 to Ex.P188 and Ex.D1 and Ex.D2 were marked. After closure of the prosecution evidence, Accused A1 to A7 were examined under Sec.313 Cr.P.C., on 29.07.2024. The case was posted for written statement and written statements filed and thereafter the case was posted for arguments. The case was adjourned from time to time for 17.04.2026.

Calendar and Judgment in C.C. No.32/2014 on the file of I Addl.

Special Judge for C.B.I., Cases, Visakhapatnam.

Complainant : State Represented by the Inspector of Police, CBI, Visakhapatnam.

Name of the accused :

1.Shri Kalluri Satyanarayana, S/o Sri Parayya, Manager (Personal Banking Division), State Bank of India, Main Branch, Bhimavaram, East Godavari District, R/o D.No.12-7-85, Near Boolakamma Temple, Bavisettivaari Peta, Eluru – 534 001, West Godavari District.

2.Shri Chaganti Chalapathi Rao, S/o Late Basava Raju, Manager (under suspension), State Bank of India, Gollapalem, East Godavari District, R/o D.No.1-67-25, Sector-2, MVP Colony, Visakhapatnam.

3.Shri Nidadavolu Venkata Ramana Rao, S/o Shri Surya Narayana Murthy, Chief Manager, State Bank of India, Mid- Corporate Group, Regional Office, Local Head Office, Hyderabad, R/o D.No.1-1-336/39, Plot No.202, Sai Kartikeya Nilayam, Vivek Nagar, Chikkadpalle, Hyderabad – 500 020.

4.Shri Manapragada Ramana Rao, S/o Shri Subba Rao, Assistant Manager (Accounts), State Bank of India, Atreyapuram, East Godavari District, R/o D.No.3-348, Rama Krishna Nagar, Rajahmundry – 533 101, East Godavari District.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 184

5.Shri Mallidi Venkata Narayana Reddy, S/o Late Veera Raghava Reddy, Managing Director, M/s VNR Refineries Pvt. Ltd., Vemulapalli – Dwarapudi, Mandapeta Mandal, East Godavari District, R/o Flat No.402, Goti Residency, Near Krishna Temple/Zilla Parishad, Maharanipeta, Visakhapatnam.

6.M/s VNR Refineries Pvt. Ltd., R/o D.No.9-82, Main Road, Ramavaram – 533 348, East Godavari District, represented by Shri Mallidi Venkata Narayana Reddy, S/o Late Veera Raghava Reddy, DOB: 14.10.1969, R/o Flat No.402, Goti Residency, Near Krishna Temple/Zilla Parishad, Maharanipeta, Visakhapatnam.

7.Shri Poduri Subba Rao, S/o Shri P.Suryanarayana Murthy, Assistant Manager, State Bank of India, Main Branch, Rajahmundry, East Godavari District, R/o D.No.6-111, Aravindnagar, Morampudi Junction, Rajahmundry – 533 103, East Godavari District.

Offence: Under Sections 120-B, 420, 468, 471 and 477-A of IPC and Section 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988.

Finding:

In the result,

1.Accused A1 to A4 and A7 are found guilty for the offences punishable U/Secs.120-B, 420 of IPC and U/Sec.13 (1) (d) r/w 13 (2) of

Prevention of Corruption Act and accordingly, they are convicted for the offence U/Sec.248 (2) Cr.P.C.

2.Accused A5 who is Managing Director of A6, and A6/ VNR

Refineries Pvt. Ltd., are found guilty for the offences punishable

U/Secs.120-B, 420, 468 and 471 of IPC and accordingly, convicted for the offence U/Sec.248 (2) Cr.P.C.

3.Accused A1 to A7 are found not guilty for the offence punishable U/Sec.477-A of IPC and accordingly, they are acquitted for the offence U/Sec.248 (1) Cr.P.C.

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I Addl. Spl. Judge’s Court for CBI Cases, VSP 185

4.Accused A1 to A4 and A7 are found not guilty for the offences punishable U/Sec.468 and 471 of IPC and accordingly, they are acquitted for the offence U/Sec.248 (1) Cr.P.C.

Accused A1 to A4 and A7 are sentenced to undergo simple imprisonment for a period of Three (3) years each and also to pay a fine amount of Rs.5,000/- (Rupees Five thousand only) each in default of payment of fine, to suffer simple imprisonment for a period of One month each for the offence under Sec.13 (1) (d) r/w 13 (2) of

Prevention of Corruption Act.

Accused A1 to A5 and A7 are sentenced to undergo simple imprisonment for a period of Two (2) years each and also to pay a fine amount of Rs.5,000/- (Rupees Five thousand only) each in default of payment of fine, to suffer simple imprisonment for a period of One month each for the offence under Sec. 120-B of IPC.

Accused No.1 to A5 and A7 are further sentenced to undergo simple imprisonment for a period of Two (2) years each and also to pay a fine amount of Rs. 5,000/- (Rupees Five thousand only) each in default of payment of fine, to suffer simple imprisonment for a period of

One month each for the offence under Sec.420 of IPC.

Accused A5 is further sentenced to undergo simple imprisonment for a period of Two (2) years each for the offences

U/Sec.468 and 471 of IPC and also to pay a fine amount of Rs.5,000/- (Rupees Five thousand only) for each offence, in default of payment of fine, to suffer simple imprisonment for a period of One month each.

Accused A6/ VNR Refineries Pvt. Ltd., is sentenced to pay a fine amount of Rs.5,000/- (Rupees Five thousand only) for each offence

U/Sec.120-B, 420, 468 and 471 of IPC.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 186

The substantive sentences imposed against A1 to A5 and A7 shall run concurrently and all Accused are entitled for set off if any, under Sec.428 Cr.PC.

It is stated that Accused was not arrested in this case.

Accused is informed about their right to prefer an appeal against this Judgment and availability of free legal aid. Free copy of this judgment supplied to them today i.e. 17.04.2026.

The bail bonds of all the Accused if any shall stands cancelled after expiry of appeal time.

SD/- Smt.P.Vijaya Durga,

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

Copy submitted to : The Hon’ble Registrar (Judicial), High Court of Andhra Pradesh, Amaravathi

Copy to:

(1) The Accused (2) The Inspector of Police through C.B.I, Visakhapatnam.

//True Copy//

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 187

CALENDAR CASE NO.32/2014

EXAMINATION OF ACCUSED UNDER Sec.248(2) Cr.P.C.

WITH REGARD TO QUESTION OF SENTENCE

Name of the Accused: Kalluri Satyanarayana (A1)

Father’s Name: Parayya

Date of Judgment: 17.04.2026

Q:You are found guilty under Sections 120-B, 420 of IPC and

U/Section 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988.

What do say about question of sentence to be found against ?

[ACCUSED]

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 188

CALENDAR CASE NO.32/2014

EXAMINATION OF ACCUSED UNDER Sec.248(2) Cr.P.C.

WITH REGARD TO QUESTION OF SENTENCE

Name of the Accused: Chaganti Chalapathi Rao (A2)

Father’s Name: Ch.Basava Raju (Late)

Date of Judgment: 17.04.2026

Q:You are found guilty under Sections 120-B, 420 of IPC and

U/Section 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988.

What do say about question of sentence to be found against ?

[ACCUSED]

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 189

CALENDAR CASE NO.32/2014

EXAMINATION OF ACCUSED UNDER Sec.248(2) Cr.P.C.

WITH REGARD TO QUESTION OF SENTENCE

Name of the Accused: Nidadavolu Venkata Ramana Rao (A3)

Father’s Name: Surya Narayana Murthy

Date of Judgment: 17.04.2026

Q:You are found guilty under Sections 120-B, 420 of IPC and

U/Section 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988.

What do say about question of sentence to be found against ?

[ACCUSED]

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 190

CALENDAR CASE NO.18/2015

EXAMINATION OF ACCUSED UNDER Sec.248(2) Cr.P.C.

WITH REGARD TO QUESTION OF SENTENCE

Name of the Accused: Manapragada Ramana Rao (A4)

Father’s Name: Subba Rao

Date of Judgment: 17.04.2026

Q:You are found guilty under Sections 120-B, 420 of IPC and

U/Section 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988.

What do say about question of sentence to be found against ?

[ACCUSED]

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 191

CALENDAR CASE NO.32/2014

EXAMINATION OF ACCUSED UNDER Sec.248(2) Cr.P.C.

WITH REGARD TO QUESTION OF SENTENCE

Name of the Accused: Mallidi Venkata Narayana Reddy (A5),

Managing Director of M/s VNR Refineries Pvt. Ltd/ A6

Father’s Name: M.Veera Raghava Reddy

Date of Judgment: 17.04.2026

Q:You are found guilty under Sections 120-B, 420, 468 and 471 of

IPC. What do say about question of sentence to be found against ?

[ACCUSED]

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 192

CALENDAR CASE NO.32/2014

EXAMINATION OF ACCUSED UNDER Sec.248(2) Cr.P.C.

WITH REGARD TO QUESTION OF SENTENCE

Name of the Accused: VNR Refineries Pvt. Ltd. (A6), represented by its Managing Director / A5

Father’s Name:

Date of Judgment: 17.04.2026

Q:You are found guilty under Sections 120-B, 420, 468 and 471 of

IPC. What do say about question of sentence to be found against ?

[ACCUSED]

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 193

CALENDAR CASE NO.32/2014

EXAMINATION OF ACCUSED UNDER Sec.248(2) Cr.P.C.

WITH REGARD TO QUESTION OF SENTENCE

Name of the Accused: Poduri Subba Rao (A7)

Father’s Name: P.Suryanarayana Murthy

Date of Judgment: 17.04.2026

Q:You are found guilty under Sections 120-B, 420 of IPC and

U/Section 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act, 1988.

What do say about question of sentence to be found against ?

[ACCUSED]

I ADDL.SPECIAL JUDGE FOR CBI CASES,

VISAKHAPATNAM.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 194

O/o I Addl. Special Judge for CBI Cases, Visakhapatnam, Dt.17.04.2026.

ACKNOWLEDGMENT OF THE ACCUSED

I, Kalluri Satyanarayana (A1), S/o Parayya, in this case acknowledge the receipt of free copy of Calender and Judgment in

CC.32/2014 on the file of Hon’ble I Addl. Special Judge for CBI Cases,

Visakhapatnam on this day i.e.17.04.2026.

[KALLURI SATYANARAYANA] //Attested//

I Addl. Special Judge for C.B.I.Cases, Visakhapatnam.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 195

O/o I Addl. Special Judge for CBI Cases, Visakhapatnam, Dt.17.04.2026.

ACKNOWLEDGMENT OF THE ACCUSED

I, Chaganti Chalapathi Rao (A2), S/o Late Basava Raju, in this case acknowledge the receipt of free copy of Calender and Judgment in CC.32/2014 on the file of Hon’ble I Addl. Special Judge for CBI

Cases, Visakhapatnam on this day i.e.17.04.2026.

[CHAGANTI CHALAPATHI RAO] //Attested//

I Addl. Special Judge for C.B.I.Cases, Visakhapatnam.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 196

O/o I Addl. Special Judge for CBI Cases, Visakhapatnam, Dt.23.12.2025.

ACKNOWLEDGMENT OF THE ACCUSED

I, Nidadavolu Venkata Ramana Rao (A3), S/o Surya Narayana

Murthy, in this case acknowledge the receipt of free copy of Calender and Judgment in CC.32/2014 on the file of Hon’ble I Addl. Special

Judge for CBI Cases, Visakhapatnam on this day i.e.17.04.2026.

[NIDADAVOLU VENKATA RAMANA RAO] //Attested//

I Addl. Special Judge for C.B.I.Cases, Visakhapatnam.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 197

O/o I Addl. Special Judge for CBI Cases, Visakhapatnam, Dt.17.04.2026.

ACKNOWLEDGMENT OF THE ACCUSED

I, Manapragada Ramana Rao (A4), S/o Subba Rao, in this case acknowledge the receipt of free copy of Calender and Judgment in

CC.32/2014 on the file of Hon’ble I Addl. Special Judge for CBI Cases,

Visakhapatnam on this day i.e.17.04.2026.

[MANAPRAGADA RAMANA RAO ] //Attested//

I Addl. Special Judge for C.B.I.Cases, Visakhapatnam.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 198

O/o I Addl. Special Judge for CBI Cases, Visakhapatnam, Dt.17.04.2026.

ACKNOWLEDGMENT OF THE ACCUSED

M/s VNR Refineries Pvt. Ltd/ A6 represented by its Managing

Director Mallidi Venkata Narayana Reddy (A5), S/o Late Veera

Raghava Reddy, in this case acknowledge the receipt of free copy of

Calender and Judgment in CC.32/2014 on the file of Hon’ble I Addl.

Special Judge for CBI Cases, Visakhapatnam on this day

i.e.17.04.2026.

[MALLIDI VENKATA NARAYANA REDDY] //Attested//

I Addl. Special Judge for C.B.I.Cases, Visakhapatnam.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 199

O/o I Addl. Special Judge for CBI Cases, Visakhapatnam, Dt.17.04.2026.

ACKNOWLEDGMENT OF THE ACCUSED

I, Mallidi Venkata Narayana Reddy (A5), S/o Late Veera

Raghava Reddy, Managing Director of A6 / M/s VNR Refineries Pvt.

Ltd., in this case acknowledge the receipt of free copy of Calender and

Judgment in CC.32/2014 on the file of Hon’ble I Addl. Special Judge for

CBI Cases, Visakhapatnam on this day i.e.17.04.2026.

[MALLIDI VENKATA NARAYANA REDDY] //Attested//

I Addl. Special Judge for C.B.I.Cases, Visakhapatnam.

CC 32/2014, dt.17.04.2026

I Addl. Spl. Judge’s Court for CBI Cases, VSP 200

O/o I Addl. Special Judge for CBI Cases, Visakhapatnam, Dt.17.04.2026.

ACKNOWLEDGMENT OF THE ACCUSED

I, Poduri Subba Rao (A7), S/o P.Surya Narayana Murthy, in this case acknowledge the receipt of free copy of Calender and Judgment in CC.32/2014 on the file of Hon’ble I Addl. Special Judge for CBI

Cases, Visakhapatnam on this day i.e.17.04.2026.

[PODURI SUBBA RAO] //Attested//

I Addl. Special Judge for C.B.I.Cases, Visakhapatnam.

I.A.89/2021 in O.S.67/20211PSCJC/VSP

IN THE COURT OF THE PRINCIPAL SENIOR CIVIL JUDGE,

VISAKHAPATNAM

Present: Smt P.Vijaya Durga,

Principal Senior Civil Judge,

Visakhapatnam.

Thursday, this the 22nd day of July, 2021

I.A.89/2021 in O.S.No.67/2021

(System Generated No.1/2021 in O.S.67/2021)

Between

Nadimpalli Rajesh Kumar Raju, S/o. Late N.S.S.S.Raju, Hindu, aged 48 years, residing at 7930 Bay Pointe DR APTB5, Tompa F @ 33615, USA, as per orders in I.A. 125/2021 General Power of Attorney Holder name is deleted and petitioner/plaintiff present address is 1-101, Melugupaka village, Munagapaka Mandal, Visakhapatnam District

...Petitioner/plaintiff

A n d:

1. Cheepulla Ammoramma, W/o. Late Yerrayya, Hindu, aged 68 years, resident of D.No.10-8-A, Gangadapalem, K.Nagarapalem village, Kapuluppada Panchayat, Bheemunipatnam Mandal, Visakhapatnam.

2. Ummadi Danayyamma, W/o. Appanna, D/o. Cheepulla late Appanna, Hindu, aged 47 years, resident of D.No.32-30-109, S.V.P. Nagar, Kobbarithota, GVMC, Visakhapatnam.

3. Cheepulla Yellayyamma, W/o. Late Polayya, Hindu, aged 58 years, resident of D.No.32-30-112, S.V.P.Nagar, Kobbarithota, GVMC, Visakhapatnam.

4. Cheepulla Dannayya, S/o. Late Polayya, Hindu, aged 46 years, resident of D.No.32-30-112, S.V.P.Nagar Kobbarithota, GVMC, Visakhapatnam.

5. Cheepulla Appanna, S/o. Late Polayya, Hindu, aged 41 years, resident of D.No.32-30-112, S.V.P.Nagar, Kobbarithota, GVMC, Visakhapatnam.

6. Cheepulla Chinna, S/o. Late Polayya, Hindu, aged 35 years, resident of D.No.32-30-112, S.V.P.Nagar, Kobbarithota, GVMC, Visakhapatnam.

7. Cheepulla Masenamma, W/o. Late Dasu, Hindu, aged 56 years, D.No.6- 12, Gangadapalem, K.Nagarapalem village, Kapuluppada panchyat, Bheemunipatnam Mandal, Visakhapatnam District.

8. Cheepulla Kurmadasu Masenamma, W/o. Late Yellayya, Hindu, aged 54 years, D.No.12-35/A, Mangamaripeta, K.Nagarapalem, rest -do -

9. Surapathi Yellayyamma, W/o. Late Simhadri, Hindu, aged 39 years, D.No.10-8, Gangadapalem, K.Nagarapalem Village, Kapuluppada Panchayat, Bheemunipatnam Mandal, Visakhapatnam District.

10. Parupilli Yellayyamma, W/o. Appanna, Hindu, aged 54 years, D.No.7-25, K.Nagarapalem village, Kapuluppada Panchayath, Bheemunipatnam Mandal, Visakhapatnam District.

11. Moogi Danayyamma, W/o. Nooka raju, Hindu, aged 55 years, House Hold duties, D.No.15-16-107, Yeguvapeta, Bheemunipatnam, Visakhapatnam.

12. Cheepulla Narasayyamma, W/o. Kannayya, Hindu, aged 52 years, resident of D.No.20-28-8, Near Ramalayam, Dhorapeta, Relli Veedhi, Visakhapatnam.

13. Cheepulla Venkata Ramana, S/o. Kanayya, Hindu, aged 37 years, resident of D.No.20-28-8, Near Ramalayam, Dhorapeta, Relli Veedhi, Visakhapatnam.

14. Cheepulla Polamma, W/o. Late Appala Raju, Hindu, aged 32 years, D.No.5-9, Mutyalammapalem, Cheepurupalli, Paravada, GVMC, Visakhapatnam.

I.A.89/2021 in O.S.67/20212PSCJC/VSP

15. Cheepulla Mahesh, S/o. Late Appala Raju, Hindu, aged 29 years, D.No.20- 28-8, Near Ramalayam, Dhorapeta, Relli Veedhi, Visakhapatnam.

16. Ummadi Devi, W/o. Kalyan, Hindu, aged 34 years, house hold duties, D.No.2-428, Sivaganesh Nagar, Appughar, M.V.P.Colony, Visakhapatnam.

17. Cheepulla Yellayya, brother of late Yerrayya, Hindu, aged 60 years, D.No.13-35, Mangamaripeta village, Bheemunipatnam Mandal, Visakhapatnam District.

18. Cheepulla Mahesh, S/o. Yellayya, Hindu, aged 35 years,resident of D.No.13-35, Mangamaripeta village, Bheemunipatnam Mandal, Visakhapatnam District.

19. Cheepulla Yellaji, S/o. Yellaji, Hindu, aged 30 years, resident of D.No.13- 35, Mangamaripeta village, Bheemunipatnam Mandal, Visakhapatnam District.

20. Tolada Shanthi, W/o. Tolada Appa Rao, Hindu, aged 45 years, resident of D.No.13-35, Mangamaripeta village, Bheemunipatnam Mandal, Visakhapatnam District.

21. Cheepulla Sobana, W/o. Venkata Ramana, Hindu, aged 38 years, residing at Gangadapalem, K.Nagarpalem, Village, Kapuluppada Panchayat, Bheemunipatnam Mandal, Visakhapatnam District.

22. Cheepulla Venkata Ramana, S/o. (late) Kannayya, Hindu, aged 42 years, residing at Gangadapalem, K.Nagarapalem village, Kapuluppada Panchayat, Bheemunipatnam Mandal, Visakhapatnam District.

.. Respondents/defendants

This petition is coming on 09.07.2021 for final hearing before me in the presence of Sri P.V.Reddy Naidu, Sri D.Paramdhamayya, Sri V.Subba Rao and Kum.Ramya, Advocates for the petitioner/Plaintiff and of Sri M.V.Parvateesam, Advocate for the Respondents/defendants No.1 to 20, Respondents No.21 and 22 remained exparte on 18.03.2021 and having stood over to this day for consideration till this day and this Court made the following:

O R D E R

This petition is filed by the petitioner/plaintiff under Order 39 R 1 and 2

CPC for grant of temporary injunction restraining the respondents, and their men, agents, whoever acts on their behalf from ever interfering with the plaintiff’s peaceful possession and enjoyment of the petition schedule property in any manner or whatsoever, pending disposal of the suit.

2.The averments of the sworn affidavit of the petitioner are in the following lines:

a)The petition schedule property was originally belongs to “Cheepulla

Family” of Madura Cheepullapalem village, K.Nagarapalem panchayat,

Bheemunipatnam Mandal. The petitioner further submits that the family members of the Cheepulla namely (1) Cheepulla Paradesamma and her daughter, (2) Parupulli Yellayyamma and her daughter, (3) Cheepulla

Durgalamma and her daughter, (4) Moogi Danayyamma, (5) Cheepulla

Ammoramma and her daughter, (6) Ummidi Danayyamma, (7) Cheepulla

I.A.89/2021 in O.S.67/20213PSCJC/VSP

Yellayya had alienated the property of an extent of Ac.0-43 cents situated in

Survey No.283/9 to one Saripalli Lakshmana Rao for a valuable consideration by way of a Registered Sale Deed dated 01.06.2004 vide document No.2829/2004.

(b)The said Saripalli Lakshmana Rao alienated the said property to one

Gude Appala Naidu on 23.08.2004 by way of General Power of Attorney- Cum-

Sale Deed vide document No. 4873/2004 for valuable consideration. The said

Registered General Power of Attorney Holder Gadu Appala Naidu alienated the said property to one Smt. Nadimpalli Aneela by way of Registered Sale deed

dated 18.11.2004 vide document No. 6803/2004. The said Smt.Nadimpalli

Aneela had applied for pattadhar passbook for schedule mentioned property.

After conducting enquiry, the Revenue Authorities issued pattadhar passbook in the name of Smt.N.Aneela on 12.01.2005. Before registering the property in the name of N.Aneela her vendors had constructed compound wall erected an iron gate to the schedule mentioned property.

(c)The said Nadimpalli Aneela alienated the property to the petitioner by way of registered sale deed dated 27.11.2013 under document No.3689/2013 for a valuable sale consideration and ever since then the petitioner is in peaceful possession and enjoyment of the petition schedule property. Basing on the registered sale deed, name of the petitioner mutated in the Revenue records. Service connection also issued by the Electricity Department.

(d) The petitioner came to know that after declaring the Visakhapatnam as

Capital, the values of the vacant site are abnormally increased in the entire

Visakhapatnam District. The petitioner intended to return to India within few months in this year, anticipate rapid increase in the Covid-19 and instructed the watchman as well as one person Pragada Raju Babu, who is close to his father- in-law to remove the bushes in the petition schedule property and to fill the schedule property by dumping the gravel. The petitioner also instructed the

Pragada Raju Babu to get repair the iron gate which was damaged in the hud- hud cyclone. Watchman started dumping gravel by engaging a J.C.B. for

I.A.89/2021 in O.S.67/20214PSCJC/VSP leveling the petition schedule property. At that juncture, the respondents approached the schedule mentioned property and stopped the work of the petitioner’s highhandedly. Most of the respondents of legal heirs and original vendors, who alienated schedule mentioned property on 01.06.2004. They having kept quite for 17 years, they started discrepancy at the schedule mentioned property. The petitioner came to know that Cheepulla Sobana belongs to S.C./S.T caste and had inter caste marriage with the 22nd respondent and they went up to an extent to register a false S.C./S.T. case through one

Cheepulla Sobana and her husband Venkata Ramana against the watchman of the petitioner. The respondents are openly proclaimed that they have local political leaders support and not to allow the petitioner’s men to proceed with any work. Hence, he filed the present petition.

3.Counter filed by the Respondent No.15. Adoption memo is filed by

Respondents No.1 to 14 and 16 to R20. Respondents No.21 and 22 set exparte.

4.Averments of the counter are in the following line:

(a)The respondents submits that the General Power of Attorney Holder has no locus stand to represent on his principal N.Rajesh Kumar Raju because the

GPA was executed at USA but not before the General Power of Attorney Holder and the said GPA must be certified by the District Registrar of Visakhapatnam, otherwise that GPA is not valid under law. On this score alone, the petition is liable to be dismissed.

(b)The allegations of the petition is that Cheepulla family of Cheepullapalem village and the names mentioned in the petition affidavit . Cheepulla

Paradesamma and 7 others had alienated the suit schedule property to an extent of Ac0.43cents in Survey No.283/9 to one Saripalli Lakshmanarao under a registered sale deed in the year 2004 is cooked up document. They never alienated the property to any person either to Saripalli family or to any other person. As such since no alienation was made out to any person much less

Saripalli Lakshmana Rao, he had no right to alienate the property to third

I.A.89/2021 in O.S.67/20215PSCJC/VSP parties.

(c)He further submits that as per the S.L.R.10(1) & Adangal for fasily 1414, the petition schedule property belongs to one Cheepulla Maseenu, who got the same from his fore-fathers and his elder son Cheepulla Yerrayya’s name was mentioned as Kathadar and pattadar. The said Maseenu had three sons by name (1) Cheepulla Yerrayya (2) Cheepulla Kannayya, (3) Cheepulla Yellayya.

Out of threes, two sons are no more. Cheepulla Yerrayya had 5 sons namely

Cheepulla Appanna, Cheepulla Pollayya, Cheepulla Appanna, Cheepulla Rajanna & Cheepulla Danayya. Cheepulla Ammoramma is the wife of late Appanna and ummidi Danayyamma is the daughter of late Appanna. Cheepulla

Yellayyamma, w/o. Late Polayya is the daughter of late Danayya, Cheepulla

Appanna and Cheepulla Chinna are the sons of late Polayya.

(d)CheepullaMasenamma,KuramdasuMaseenamma,Surapati

Yellayyamma are the daughters of Cheepulla Appanna. Parupalli Yellayyamma,

W/o. Appanna is the daughter of Rajanna. Moogi Danayamma, W/o. Nookaraju is the daughter of Cheepulla Danayya. Cheepulla Kannayya, who is the second son of late Maseenu had wife and four children namely (1) Cheepulla

Narasayyamma is wife, (2) Cheepulla Venkata Ramana, (3) Cheepulla Polamma, (4) Cheepulla Mahesh and (5) Ummidi Devi. The third son of Cheepulla

Maseenu is Cheepulla Yellayya and he is having three children i.e. (1) Cheepula

Mahesh, (2) Cheepulla Yellaji and (3) Tholada Santhi.

(e)The above persons constitute Hindu Joint Family and were the legal representatives and also heirs of late cheepulla Maseenu. Either Cheepulla

Maseenu or his son i.e. Yerrayya, Kannayya & Yellayya or their family members never alienated, the petition schedule property to any person and they have been in peaceful possession and enjoyment of the petition schedule property.

They also constructed some small thatched sheds in the petition schedule property and residing there in with their respective family members, Due to

Hud Hud toofan, the thatched sheds constructed by them were collapsed. Later

I.A.89/2021 in O.S.67/20216PSCJC/VSP the respondents by investing huge amounts built small sheds and kept the tools in the petition schedule property and they are residing therein by constructing small sheds. The respondents No.1 to 20 belongs to Fishermen Community and are economically backward having no backing and are rustic people having wordly knowledge.

(f)The respondents intended to construct pucca houses in the petition schedule property and as such by investing huge amount removed the ditches and filled gravel and erected iron gates etc in the petition schedule property.

(g)The respondents denied the allegations in the sworn affidavit of the petitioner.

(h)Henchman of the petitioner are trying to interfere with the petition schedule property and obstructed the respondents from dumping the gravel in the petition schedule property and also threatened the respondents and even scolded the respondents by naming caste and that regard the respondent lodged a report against the henchman of the petitioner and a case was registered by the police under SC & ST Atrocities Act. After coming to know about filing of the caveat original petition, the petitioner filed the present suit.

The respondents used to attend to labour work to have some extra earnings.

One Saripalli Lakshmana Rao used to supply labour and continuously used to depute some of the respondents as his labourers and in that process, the said

Saripalli Lakshmana Rao obtained photos of some of the respondents under the pretext of issuing Identity Cards to have a free entry into the Fish

Processing Unit. But mischievously the said Saripalli Lakshman being won over used the photos obtained from some of the respondents and concocted a fake sale deed. Way back on 27.04.1989, taking advantage of the illiteracy and lack of wordly knowledge, one George Anne Verghese, D/o. Verghese of Rama

Krishanapuram, Visakhapatnam came to the petition schedule property and highhandedly tried to disturb the peaceful possession and enjoyment of the respondents and due to the timely intervention of the respondents and

I.A.89/2021 in O.S.67/20217PSCJC/VSP neighbours, she left the petition schedule property. The alleged documents produced by Anne Verghese are not valid and concocted documents. During the year 2004, Vague attempt was made by Saripalli Lakshmana Rao to occupy the petition schedule property by someone and the act of that person is timely resisted by the respondents. The documents filed by the petitioner are cooked up documents. Photos filed by the petitioner has no validity to the present suit. Since the property in question is running into lakhs and respondents are rustic people having no wordly knowledge and are not backed with men, material or money, the petitioner with a cruel intention to grab the petition schedule property by laying a hand on the petition schedule property tried to dispossess the respondents.

(i)The schedule mentioned is not correct. The correct schedule is Survey

No. 283/9 Plot No.483 of Cheepullapalem village, Kapula Uppada,

Bheemunipatnam Mandal, Visakhapatnam bounded by

East:Government land assigned to respondents family members

South :Government land assigned to respondents family members

West :Land in Survey No.283/13

North:Road leading to Dhomatipeta village.

05.Respondents filed additional counter and they submits that the petitioner filed petition under section 151 CPC only for deletion of GPA Holder without seeking any consequential amendments under order 6 Rule 17 r/w Rule 28 Civil

Rules of Practice. Without seeking consequential amendments, the petitioner amend the petition and the plaint so amendment petition is not looked into. As per I.A.125/2021, when the GPA holder is deleted by the petitioner, he ask the permission to file fresh suit in different cause of action, without leave of the

Court the petitioner amended the plaint and petition.

06. The petitioner has no personal knowledge about the respondents and also cause of action as at that time the petitioner was in USA. Where there is no cause of action the suit itself is to be rejected under Order 7 Rule 11 CPC.

I.A.89/2021 in O.S.67/20218PSCJC/VSP

There is a title dispute in suit schedule property, third party sold a schedule property to 5 members on 27.05.1989 for the same survey number and same extent and the same schedule without the consent of the original owners i.e.

respondents. On 27.05.2004 one Saripalli Laksmana Rao obtained GPA Cum

Agreement of sale for the same schedule property and the boundaries from the same owners. The said GPA Cum Agreement of sale is suppressed by the said

Saripalli Laksmana Rao and he created and fabricated registered sale deed

dated 01.06.2004 with the some other persons and sold the same to one

Appala Naidu in turn the said Appala Naidu sold the same to the wife of plaintiff. The said Aneela sold the same to her husband, who is the petitioner herein. All the transactions are paper transactions only no one come to the schedule property because the property belongs to respondents. Wife of petitioner created the pass book. If really she purchased the property, she ought to obtain passbook and title deed. The respondent No.15 applied under

RTI Act to the MRO, Bheemunipatnam where she obtained the passbook for the schedule land. The MRO gave a reply that the concerned record is not available in the office. Hence they pray the honourable Court to dismiss the petition.

07.During the course of enquiry, on behalf of the petitioner Ex.P1 to Ex.P17 got marked. On behalf of the respondents, Ex.R.1 to Ex.R13 got marked.

08.Heard both sides through virtual conference.

09.Now the point for consideration is:

Whether the petitioner is entitled for a temporary injunction as prayed for?

Point:

10.Admittedly, the petition schedule property is originally belongs to

Cheepulla family of Madhura Cheepulla Palem village, K.Nagarapalem

Panchayat of Bheemunipatnam Mandal. The case of the petitioner is that the family members of the Cheepulla namely (1) Cheepulla Paradesamma and her daughter, (2) Parupulli Yellayyamma and her daughter, (3) Cheepulla

Durgalamma and her daughter, (4) Moogi Danayyamma, (5) Cheepulla

I.A.89/2021 in O.S.67/20219PSCJC/VSP

Ammoramma and her daughter, (6) Ummidi Danayyamma, (7) Cheepulla

Yellayya had alienated the property of an extent of Ac.0-43 cents situated in

Survey No.283/9 to one Saripalli Lakshmana Rao for a valuable consideration by way of a Registered Sale Deed dated 01.06.2004 vide document No.2829/2004 under Ex.P1. The said Saripalli Laksmana Rao alienated the above property to one Gude Appala Naidu under Ex.P2 by way of General Power of Attorney cum sale deed vide document No.4873/2004. He further submits that the said

Registered General Power of Attorney Holder Gude Appala Naidu alienated the said property to Nadipalli Aneela by way of Registered sale deed on 18.11.2004 vide document No.6803/2004 under Ex.P3. In turn the said Nadimpalli Aneela alienated the property to the petitioner by way of registered sale deed dated 27.11.2013 under document No.3689/2013 under Ex.P4. Since then the petitioner is in peaceful possession and enjoyment of the petition schedule property. The said Nadimpalli Aneela is the wife of Nadipalli Rajeev Kumar of

Bheemunipatnam. The respondents stated that Nadimpalli Aneela is the wife of the petitioner. As per the document under Ex.P2 and Ex.P3 which disclose that the Nadimpalli Aneela is wife of Nadipalli Rajeev Kumar, but not the wife of petitioner.

11.As per Ex.P1 to Ex.P4 which disclose all the registered sale deeds from 2004 to 2013. The petitioner advocate argued that the settled proposition of law under T.P.Act as well as Stamps and Registration Act, and Indian Evidence

Act says that the registered documents need not be proved, until and unless those documents will be disprove by another authenticated documents. In the present case, the respondents has not placed any authenticated documents to disprove the genuinity of the Ex.P1 to Ex.P4.

12.The petitioner to support of his case, he filed Ex.P5 is 1(B) issued by

Government in respect of the petition schedule property in the name of the petitioner. He also filed another document Ex.P6 the electrical receipt issued by the Electricity department in respect of new service connection, the service

I.A.89/2021 in O.S.67/202110PSCJC/VSP connection was issued in the name of petitioner in respect of the suit schedule property dated 04.02.2017. The petitioner submits that the electrical service connection was existence to the shed situated in the petition schedule property.

The petitioner also filed Ex.P7 is the electrical payment consumption charges issued by Assistant Executive Engineer, Operation section, APEPDCL,

Bheemunipatnam which disclose that the petitioner is paying electricity consumption charges from 01.04.2017 to till date. Ex.P6 and Ex.P7 which disclose that the petitioner is in possession of the petition schedule property.

13.The petitioner also filed Ex.P8 is the photographs number in 10 with CD.

The petitioner submits that these photographs disclose about the cause of action stated by the petitioner that the petitioner engaged machinery for removal of jungle bushes in the petition schedule property and the respondents obstructed the work. The identity of the respondents not denied by the petitioner. The petitioner also filed Ex.P9 photographs showing the existence of electricity service connection to the shed. Ex.P10 is the photograph, the petitioner stated that the said documents showing the resistance of the adamant attitude of the respondents by the police officer in the petition schedule property. He further submits that the photographs discloses the vacant land after removing the bushes. Ex.P11 is email forwarded by petitioner from USA to the GPA Holder with a specific instructions for purchase the necessary stamp adviser for filing the GPA before any court and gave instructions to take a steps to protect the property. Ex.P12 is encumbrance certificate obtained by the brother-in law of the petitioner on 06.05.2021 in respect of the petition schedule property from period from 01.01.1992 to 22.02.2021. The encumbrance certificate disclose all the transactions under

Ex.P1 to Ex.P4 which disclose that the petitioner purchased the petition schedule property from Nadimpalli Aneela. Ex.P13 is the passport of the petitioner compared with original. The petitioner filed all the above documents to support of his case to show that he purchased the petition schedule property under registered sale deed under Ex.P4 and his vendors also got right over the

I.A.89/2021 in O.S.67/202111PSCJC/VSP petition schedule property. The petitioner also filed Ex.P14 is the endorsement of the Public Information Officer on the application filed under RTI Act for certain information with regard to the information given by the Public Information

Officer, Bheemunipatnam to K.Dasu I.e Ex.P15. The document under Ex.P15 discloses that on the application filed by the K.Dasu, the Public information

Officer gave a certain information relating to the petition schedule property and he handed over SLR, 10(1) adangal, FMB, Adangal for facili 1414, meebhoomi.ap.gov.in online web land adangal in respect of petition schedule property. As per this document disclose that the Public information Officer gave a information and issued documents to the K.Dasu. Ex.P16 is the application submitted by the petitioner to the Public Information Officer. The petitioner argued that as per document under Ex.P15 the Public Information Officer gave a information to one K.Dasu but not Ch.Mahesh, 15th respondent in this case.

Ex.P17 is the photograph showing the petition schedule property and neighbouring properties.

14.The respondent submits that the respondents used to attend the labour work to have some extra earnings. One Saripalli Lakshmana Rao used to supply labour and continuously used to depute some of the respondents as his labourers and in that process the said Saripalli Lakshmana Rao obtained photograph of the respondents under the pretext of issuing identity cards to have a free entry into fish processing unit. But mischievously the said Saripalli

Lakshmana Rao used the said photos obtained from respondents and created the sale deeds by taking the advantage of illiteracy and lack of knowledge. One

George Anney Vergase, Visakhapatnam came to the petition schedule property and highhandedly try to disturb the peaceful possession and enjoyment of the respondents and due to timely intervention of the respondents and neighbours, she left the property. During the 2004, Vague attempt was made by Saripalli

Lakshmana Rao to occupy the petition schedule property and resisted by the respondents.

I.A.89/2021 in O.S.67/202112PSCJC/VSP

15.The case of the respondent is that Saripalli Laksmana Rao created the fake sale deed by obtaining the photographs of the some of the respondents. If the respondents are dispute the sale deeds they have to proceed as per the law against the persons who created the alleged documents. The respondent filed

Ex.R1 the endorsement issued by Public Information Officer dated 23.01.2021, a perusal of this document the name was painted and inserted the name of 15th respondent Ch.Mahesh. The petitioner argued that the said document is created by the respondents to support he filed document under Ex.P15 which was obtained under RTI Act by the petitioner which clearly shows that one

K.Dasu submitted application under RTI Act in respect of the petition schedule property and the Public Information Officer given information and issued documents to the K.Dasu but not Ch.Mahesh. Even after questioning the document under Ex.R1 by the petitioner, the respondent did not take step to file original of Ex.R1. The respondent filed Ex.R2 is certified copy of registered sale deed dated 27.04.1989 in respect of 508 square yards of property in

Kapulluppada village in Survey No. 28/9 by plot no.2, the lay out belongs to one

George Anne Verghase. This document is in the name of Ummidi Marayya but not in the name of respondents. Except filing of this document, the respondent did not state anything in his counter. Ex.R3 is extract of registered GPA executed by the Saripalli Laksmana Rao which is equivalent to Ex.P1, the respondent stated that Saripalli Lakshmana Rao made an effort to extract the petition schedule property. If the respondent deny the document under Ex.P1 equalent to Ex.R3 they have to take steps through court of law for cancellation of sale deed. But they did not take any steps till today and also not explained

before the court. They simply stated that Saripalli Lakshmna Rao created the

Ex.P1=Ex.R3. Ex.R4 is the Encumbrance Certificate from 01.01.1983 to 29.07.2018 this document also disclose with regard to the transaction of the

Ex.P1 and Ex.P2. Ex.R5 is E.C. issued by Sub-Registrar, is also disclose the transaction of Ex.P1 and Ex.P2. Ex.R6 is photographs. Ex.R7 is the receipt issued by P.Siva, Earth Movers and Suppliers, Peddipalem on 10.02.2021, this

I.A.89/2021 in O.S.67/202113PSCJC/VSP document does not disclose with regard to the property where the gravel was dump, this document was noway helpful to the respondent case. Ex.R8 is E.C.

from 01.01.1983 to 15.03.2021, this document also disclose the transactions of different plots in Survey No.283/9. Ex.R9 to R12 are the certified copies of the sale deeds of various house plots. The petitioner argued that the documents under Ex.R9 to R12 relating to the other properties. Ex.R9 to Ex.R12 are relating to the third parties but not in the name of the respondents. Ex.R13 is the endorsement dated 30.05.2021 issued by Public Information Officer on the application of Ch.Mahesh, who is the 15th respondent. The respondent did not file the original of Ex.R1, he filed the document under Ex.R13 which was obtained recently in the month of May 2021. Even after taken objection by the petitioner.

16.The respondents contended that without seeking consequential amendment the petitioner amended the plaint and petition. In this case, as per the direction of this court in I.A.125/2021 the petitioner made a amendments in the plaint as well as in the affidavit. The respondent take a another objection that when the GPA Holder was deleted by the petitioner herein, the plaintiff should ask permission to file a fresh suit in different cause of action. Perusal of the record, as per the direction of this court, the name of the GPA holder is deleted and permitted the petitioner to represent the case. The suit was filed by the GPA Holder on behalf of the petitioner/plaintiff to context the case. Hence, the filing of the fresh suit does not arise. After knowing the cause of action, the plaintiff filed the present suit represented by General Power of Attorney Holder.

Hence the question of rejecting the plaint under order 7 Rule 11 CPC does not arise.

17.As per the discussions above, the petitioner proved the possession of the petition schedule property basing on his title under Ex.P4. The petition schedule property is the vacant land. Hence, the petitioner proved the possession basing on the sale deed under Ex.P4. Hence, there is a prima facie of case and balance of convenience in favour of the petitioner. Hence, this point is

I.A.89/2021 in O.S.67/202114PSCJC/VSP answered accordingly.

18.In the result, this petition is allowed by granting temporary injunction in favour of the petitioner restraining the respondents, and their men, agents, whoever acts on their behalf from ever interfering with the plaintiff’s peaceful possession and enjoyment of the petition schedule property in any manner or whatsoever, pending disposal of the suit. No costs.

Typed to my dictation to the Stenographer, corrected and pronounced by me in the virtual conference this the 22nd day of July, 2021.

Principal Senior Civil Judge,

Visakhapatnam.

Appendix of evidence

witness examined

For petitioner/plaintiff: For Respondents/Defendants

No oral evidence adduced on either side

DOCUMENTS MARKED

For Petitioner/ Plaintiff:

Ex.P1:Extract of Registered sale deed executed by Cheepulla Family in favour of S.Lakshmana Rao dated 01.06.2004 Ex.P2:Extract of Registered GPA executed by S.Lakshmana Rao in favour of G.Appala Naidu dated 23.08.2004 Ex.P3:Extract of Registered sale deed executed by G.Appala Naidu in favour of Smt.N.Aneela dated 18.11.2004 Ex.P4:Extract of Registered sale deed executed by Smt.N.Aneela in favour of petitioner/plaintiff dated 27.11.2013 Ex.P5:Original latest I-B issued by the Government of Andhra Pradesh dated 16.02.2021 Ex.P6:On line copy of Application to the electricity department for mutating the service connection in the name of the petitioner/plaintiff dated 04.02.2017 Ex.P7:Statement of particulars showing payment of electrical consumption charges issued by the Assistant Executive Engineer, A.P.E.P.D.C.L., Bheemunipatnam Ex.P8:10 photographs & C.D. taken when the defendants high handedly obstructing the work of the petitioner/plaintiff’s with J.C.B. Ex.P9:Photographs with D.D. taken by the GPA Holder showing the existence of electrical service connection Ex.P10:Photo showing enquiry made by the police when the gate and compound wall of the schedule property removed by the defendants/Respondents Ex.P11:On line GPA executed by Petitioner/plaintiff in favour of the GPA

I.A.89/2021 in O.S.67/202115PSCJC/VSP

Holder together with screen shot of the mail. Ex.P12:Statement of Encumbrance on property from 01.01.1992 to 22.02.2021 Ex.P13:Compared copy of passport of Nadimpalli Rajesh Kumar Raju Ex.P14:Endorsement dated 01.04.2021 issued by the office of the Tahsildar, BheemunipatnamtoN.RajeshKumarRajuvide S.R.No.160/2021/RTI/dt:01.04.2021. Ex.P15:Endorsement dated 23.01.2021issued by the Public information officer and Deputy Tahsildar, Office of the Tahsildar, Bheemunipatnam Mandal to K.Dasu vide S.R.No.17/2021/RTI/Dt:23.01.2021

Ex.P16:Application submitted under RTI Act submitted by the petitioner/plaintiffdated31.03.2021totheTahsildar, Bheemunipatnam Ex.P17:Two photographs along with C.D.

For Respondents/Defendants:

Ex.R1:Endorsement dated 23.01.2021 issued by office of the Tahsildar, BheemunipatnamtoCh.MaheshvideS.R. No.17/2021/RTI/Dt:23.01.2021 Ex.R2:Extract of Registered Sale deed of George Annie Verghase dated 27.04.1989 Ex.R3:Extract of GPA cum Agreement of Saripalli Lakshmana Rao dated 27.05.2004 Ex.R4: Encumbrance certificate dated 30.07.2018 Ex.R5:Encumbrance Certificate dated 25.01.2021 Ex.R6:Photographs (7 in number) along with C.D. Ex.R7:Receipt’s (10 in number) issued by Siva Earth Movers and Materials supplier, Peddipalem Ex.R8:Certified copy of Encumbrance certificate dated 16.03.2021 Ex.R9:Certified copy of Registered sale deed vide document No.947/1989 Ex.R10:Certified copy of Registered sale deed vide document No. 948/1989 Ex.R11:Certified copy of Registered sale deed vide document No.949/1989 Ex.R12:Certified copy of Registered sale deed vide document No.502/2001 Ex.R13:Endorsement dated 30.05.2021 issued by the Office of the Tahsildar,BheemunipatnamvideS.R.No. 209/2021/RTI/Dt:30.05.2021 to Ch.Mahesh

Principal Senior Civil Judge,

Visakhapatnam.

I.A.89/2021 in O.S.67/202116PSCJC/VSP

O.S.225/2020, dt.14.06.2021 1 PSCJC/VSP

IN THE COURT OF THE PRINCIPAL SENIOR CIVIL JUDGE

VISAKHAPATNAM

Present: Smt P.Vijaya Durga,

Principal Senior Civil Judge,

Visakhapatnam.

Monday, this the 14th day of June, 2021

Original Suit No.225/2020

Between:

1. Nalli Elias Anand, S/o. Late Anandam, aged 78 years, resident of Daspalla Hills, D.No.11-8-36, Plot No.91, Visakhapatnam represented by his GPA Holder Pilli Musalayya, bearing document Number 23166 dated 19.06.2020, son of Pilli Manikyala Rao, Hindu, aged 46 years, residing at D.No.4-2-151, Lankapeta, Bhimavaram - 2, West Godavari district.

2. Nalli Esther Rani, W/o. Anand, aged 65 years, resident of Daspalla Hills, D.No.11-8-36, Plot no.91, Visakhapatnam, represented by his GPA Holder Pilli Musalayya, bearing document Number 23165 dated 19.06.2020, son of Pilli Manikyala Rao, Hindu, aged 46 years, residing at D.No.4-2-151, Lankapeta, Bhimavaram -2, West Godavari district.

….Plaintiffs A n d:

M/s.V.N.L.Vice Roy Homes, Proprietary concern represented by Dwarapudi Murali Krishna, S/o. Late Papinaidu, aged 52 years, resident of MVP colony, Door No.2- 22-9, Sector -VI, Visakhapatnam.

… Defendant This suit is coming on 20.04.2021 for hearing before me in the presence of Sri Narra Venkata Ramana, Advocate for the plaintiffs and the defendant having remained exparte on 26.02.2021 and having stood over for consideration till this day, this Court delivered the following:

J U D G M E N T

This is a suit filed by the plaintiffs against the defendant (a) for recovery of a sum of Rs.38,84,277/- (Rupees thirty eight lakhs eighty four thousand two hundred and seventy seven only) with subsequent interest at the rate of 24% per annum from the date of institution of the suit till realisation; (b) to direct the defendant to pay an amount of Rs.10,80,000/- (Rupees ten lakhs eighty thousand only) towards rent from March, 2016 till date of filing of the suit and for costs of the suit.

2. The averments of the plaint are in the following lines:

The plaintiffs are the absolute owners of the building No.11-8-36. The defendant is proprietary of M/s.V.N.L Vice Roy Homes doing business of building

O.S.225/2020, dt.14.06.2021 2 PSCJC/VSP

apartments by developing sites in and around Visakhapatnam. The plaintiffs and defendant entered into a development agreement with Power of Attorney on 22.04.2013 and it was reduced into writing. As per the terms of the agreement both parties have their share in the developed property equally and the defendant has to get the existing building demolished with his own expenses and he has to get the building constructed with stilt, ground floor and three upper floors each consisting of two flats each flat measuring 1400 square feet. The defendants agreed to handover the flats No.101, 201, 301 and 402 in the ground floor, first floor, second floor and third floor respectively along with four car parking areas.

(b) As per the agreement the defendant has to complete the construction of the building within 18 months with a grace period of three months from the date of approval of the building plan by the GVMC and to hand over the flats to the plaintiffs in fully finished and habitual condition. In case of failure to do so, the defendant has to pay Rs.5000/- per flat per month for the period of delay towards loss of rent. The defendant obtained the permission order from the

GVMC for construction of the proposed apartment building on 26.05.2014. He commenced the construction work in the year 2015 and it was delayed by one year. The defendant got the construction of the structural slabs and brick works only so far as flats to be given to the plaintiffs and violated the terms of the agreement by unauthorisedly getting 5th floor constructed which was demolished by the GVMC. The defendant stopped the remaining work and went away. The plaintiffs tried their best to contact the defendant but in vain. The defendant mortgaged the flat No.101 agreed to be given to the plaintiffs to the GVMC without the consent. He also sold away the flats 102, 202, 302 and 401 to others. He did not provide power supply, water supply, electrical wiring, plumbing, lift, flooring, paintings, doors and windows to the flats to be given to the plaintiffs. The defendant gave undertaking on 28.10.2017 assuring he would complete all the remaining works much less the electrical, lift, flooring, plumbing by 31.12.2017 and to deliver the flats 101, 201, 301 and 402 to the plaintiffs on

O.S.225/2020, dt.14.06.2021 3 PSCJC/VSP

the even date. The defendant fail to keep his promise and undertaking. The plaintiffs got the remaining and unattended works by the defendant estimated by qualified engineers by name Ravi Kumar Enterprises, Ramnagar,

Visakhapatnam and as per estimation cost of the pending works unfinished to the flats 101, 201, 402 is Rs.7,70,790/- per flat and totally Rs.23,12,070/-. After making several requests the defendant did not respond, the plaintiffs got the remaining work completed by spending an amount of Rs.23,12,070/- for the building is exposed to rain and sub as doors and windows are not appended.

(c) The plaintiff got issued a registered lawyer notice to the defendant on 24.09.2020 demanding to pay the amount spend by them besides Rs.5000/- per flat per month as agreed by the defendant for delayed work. The said notice was returned on 30.09.2020 endorsed unclaimed. Hence, they filed the present suit.

3. The defendant failed to appear before the Court and hence, the defendant set exparte on 26.02.2021.

4. On behalf of the plaintiff, P.W.1 was examined and Ex.A1 to Ex.A6 got marked.

5. Heard the counsel for plaintiffs through virtual conference.

6. Now the point for determination is:

Whether the plaintiffs are entitled to the suit amount as prayed for?

Point:

7. To prove their contention, the General Power of Attorney Holder of the plaintiffs examined as P.W1. His testimony would reiterate all the averments in the plaint that The plaintiffs are the absolute owners of the building No.11-8-36.

The defendant is proprietary of M/s.V.N.L Vice Roy Homes doing business of building apartments by developing sites in and around Visakhapatnam. The plaintiffs and defendant entered into a development agreement with Power of

Attorney on 22.04.2013 under Ex.A1 and reduced into writing. As per the terms of the agreement both parties have their share in the developed property equally

O.S.225/2020, dt.14.06.2021 4 PSCJC/VSP

and the defendant has to get the existing building demolished with his own expenses and he has to get the building constructed with stilt, ground floor and three upper floors each consisting of two flats each flat measuring 1400 square feet. The defendants agreed to handover the flats No.101, 201, 301 and 402 in the ground floor, first floor, second floor and third floor respectively along with four car parking areas.

8. As per the agreement the defendant has to complete the construction of the building within 18 months with a grace period of three months from the date of approval of the building plan by the GVMC and to hand over the flats to the plaintiffs in fully finished and habitual condition. In case of failure to do so, the defendant has to pay Rs.5000/- per flat per month for the period of delay towards loss of rent. The defendant obtained the permission order from the

GVMC for construction of the proposed apartment on 26.05.2014. He commenced the construction work in the year 2015 and it was delayed by one year. The defendant got the construction of the structural slabs and brick works only so far as flats to be given to the plaintiffs and violated the terms of the agreement by unauthorisedly getting 5th floor constructed which was demolished by the GVMC. The defendant stopped the remaining work and went away. The plaintiffs tried their best to contact the defendant but in vain. The defendant mortgaged the flat No.101 agreed to be given to the plaintiffs to the GVMC without the consent. He also sold away the flats 102, 202, 302 and 401 to others. He did not provide power supply, water supply, electrical wiring, plumbing, lift, flooring, paintings, doors and windows to the flats to be given to the plaintiffs. The defendant gave undertaking on 28.10.2017 assuring he would complete all the remaining works much less the electrical, lift, flooring, plumbing by 31.12.2017 and to deliver the flats 101, 201, 301 and 402 to the plaintiffs on the even date. The defendant fail to keep his promise and undertaking. The plaintiffs got the remaining and unattended works by the defendant estimated by qualified engineers by name Ravi Kumar Enterprises, Ramnagar,

Visakhapatnam and as per estimation cost of the pending works unfinished to

O.S.225/2020, dt.14.06.2021 5 PSCJC/VSP

the flats 101, 201, 402 is Rs.7,70,790/- per flat and totally Rs.23,12,070/- under

Ex.A2. After making several requests the defendant did not respond, the plaintiffs got the remaining work completed by spending an amount of

Rs.23,12,070/- for the building is exposed to rain and sub as doors and windows are not appended.

9. The plaintiffs got issued ExA3 registered lawyer notice to the defendant on 24.09.2020 demanding to pay the amount spend by them besides Rs.5000/- per flat per month as agreed by the defendant for delayed work. The said notice was returned on 30.09.2020 endorsed unclaimed under ExA4.

10. The unrebutted testimony of P.W.1 coupled with documents i.e. Ex.A1 is the original registered development agreement with power of attorney dated 22.04.2013, Ex.A2 is the original Estimation report for pending work left by the defendant. Ex.A3 is the office copy of Registered lawyer’s notice dated 24.09.2020. Ex.A4 is the original returned postal cover. Ex.A5 is the original

Registered General Power of Attorney executed by the first plaintiff in favour of

Pilli Musalayya vide Doc.No.99/2020 dated 19.06.2020. Ex.A6 is the original registered General Power of Attorney executed by the second plaintiff in favour of Pilli Musalayya vide Doc.No.96/2020 dated 19.06.2020.

11. The evidence of PW1 supported the documents filed under Ex.A1 and

Ex.A2 to show that the defendant violated the terms and conditions of agreement by unauthorisedly constructed 5th floor, when GVMC demolished the 5th floor, he mortgaged the flat 101 to GVMC without the consent of the plaintiffs and stopped the remaining construction. The defendant did not appear before the Court and did not contest the matter. This Court has no hesitation to hold that the defendants failed to prove their defence and on the other hand, the unrebutted testimony of P.W.1 coupled with Exs.A.1 to A.6 would establish the case of the plaintiffs and as such, this Court holds that the plaintiff are entitled for recovery of the suit amount as prayed for.

O.S.225/2020, dt.14.06.2021 6 PSCJC/VSP

12. In the result, the suit is decreed with costs in favour of the plaintiff against the defendant for a sum of Rs.38,84,277/- (Rupees thirty eight lakhs eighty four thousand two hundred and seventy seven only) with subsequent interest at the rate of 12% from the date of suit till the date of decree and thereafter with future interest @ 6% per annum on Rs.38,84,277/- (Rupees thirty eight lakhs eighty four thousand two hundred and seventy seven only) from the date of decree, till realization and the plaintiffs are also entitled to the rent of Rs.10,80,000/- (Rupees ten lakhs eighty thousand only) from the defendant for the period from

March 2016 to till the date of filing of the suit i.e. 05.11.2020.

Typed to my dictation by the stenographer, corrected and pronounced by me in virtual conference, this the 14th day of June, 2021.

Principal Senior Civil Judge,

Visakhapatnam.

Appendix of evidence. No. of witnesses examined for Plaintiffs: Defendants: P.W.1: Pilli Musalayya -None-

No. of exhibits marked for Plaintiff:

Ex.A1 Original registered development agreement with power of attorney

dated 22.04.2013

Ex.A2 Original Estimation report for pending work left by the defendant

Ex.A3 Office copy of registered lawyer’s notice dated 24.09.2020

Ex.A4 Original returned postal cover

Ex.A5 Original registered General Power of Attorney executed by the first plaintiff in favour of Pilli Musalayya vide Document no.99/2020 dated 19.06.2020

Ex.A6 Original registered General Power of Attorney executed by the 2nd plaintiff in favour of Pilli Musalayya vide Doc.No.96/2020 dated 19.06.2020

For Defendants: NIL

PSCJ/VSP

O.S.225/2020, dt.14.06.2021 7 PSCJC/VSP

SOP 01/2021, dt.12.07.2021PSCJC/VSP 1

IN THE COURT OF THE PRINCIPAL SENIOR CIVIL JUDGE AT

VISAKHAPATNAM

Present: Smt P.Vijaya Durga

Principal Senior Civil Judge

Visakhapatnam.

Monday, this the 12th day of July, 2021

S.O.P.01/2021

Between:

1. Kantimahanti Venkata Siva Hemanth Kumar @ K.V.S.Hemanth Kumar, S/o. Late K.Krishna Shankar Patnaik, Hindu, aged 30 years, permanent resident of Door No.5-4/7, Flat F-2, Akshya Residency, Nethaji Street, Gopalapatnam, Near Mourya Theatre, Visakhapatnham – 530 027, Presently working at Indigo Airlines at Hyderabad, Now he came down to Visakhapatnam.

2. Kantimahanti Vidya Sagar, S/o. Late K.Krishna Shankar Patnaik, Hindu, aged 28 yars, permanent resident of Door No.17-266/1, Golla street, Old Gopalapatnam, Visakhapatnam – 530 027, Presently working at Hyderabad, Temporarily came down to Visakhapatnam. … Petitioners

And:

1. The Divisional General Manager, Marketing Division, Divisional Office, situated at 8th Floor, LIC Building, Visakhapatnam – 530 004.

2. The General Manager (ER), Marketing Division, Southern Region, Indian Oil Bhavan, 139, Uthamar Gandhi Road, (Nungambakkam High Road) Indian Oil Corporation Limited, Chennai – 600 034.

...Respondents

This petition has come up before me on 08.07.2021 for final hearing in the presence of Sri P.V.Rama Rao, Advocate for the petitioner and Sri Kaikala Rama Kireeti, Advocate for the respondent firm, the matter having been heard and stood over for consideration till this day, this Court made the following:

O R D E R

This petition is filed by the petitioners under Section 372 of the Indian

Succession Act for issuance of a Succession Certificate in favour of the petitioners in respect of death benefits of late Kantimahanti Krishna Sankar

Patnaik, which are under the custody of respondents company as mentioned in the schedule, costs of the petition and direct the respondents to release the death benefits of late Kantimnahanti Krishna Sankar Patnaik in favour of the petitioners.

SOP 01/2021, dt.12.07.2021PSCJC/VSP 2

2. The averments of the petitioners sworn affidavit in brief are in the following lines:

(a)The petitioners No.1 and 2 are the children of Late Kantimahanti Krishna

Shankar Patnaik and Smt.Kantimahanti VijayaLakshmi. The father of petitioner worked in Marketing Division, Divisional Office, Visakhapatnam as a Section

Officer II, bearing Employee No.23218 and the said office working under the southern Region, Indian Oil Corporation Limited, Chennai. The petitioners are the permanent residents of Visakhapatnam and both are working in private organizations to eking their livelihood at Hyderabad. Father of the petitioner

K.K.S.Patnaik died on 25.07.2020 at Visakhapatnam, while he was in service in

Indian Oil Corporation at Visakhapatnam Divisional Office and his wife i.e.

mother of the petitioner by name Smt.K.Vijaya lakshmi also died on 28.07.2020 at Gopalapatnam, Visakhapatnam and leaving the petitioners No.1 and 2 as their family members. Both the petitioners are the only family members and legal heirs of their deceased parents i.e. Sri Kantimahanti Krishna Sankar Patnaik and Smt.Kantimahanti Vijaya Lakshmi.

(b)The petitioners obtained the death certificates and Family members /Legal Heir certificates from the competent authority, they were issued in favour of the petitioners i.e. death certificate of K.K.S.Patnaik as date of death is 25.07.2020 and the death was registered bearing registration No.D-2020:28-90- 221-000995 dated 12.08.2020 and the same was issued to the petitioners on 18.08.2020 and death certificate of K.Vijaya Lakshmi, date of death is 28.07.2020, and the death was registered bearing registration No.D-2020:28-90- 226-000664 dated 18.08.2020 and the same was issued to the petitioners on 20.08.2020. The first petitioner is the elder son and second petitioner is the younger son of late Sri K.Krishna Sankar Patnaik, who passed away on 25.07.2020 and Smt.K.Vijayalakshmi W/o. Late K.Krishna Sankar Patnaik also passed away on 28.07.2020 leaving behind the two petitioners as the surviving legal heirs and the Tahsildar, Visakhapatnam, after due enquiry had also issued a Family member certificate dated 22.10.2020 and 01.09.2020.

SOP 01/2021, dt.12.07.2021PSCJC/VSP 3

(c) As on the date of his death, Sri K.Krishna Sankar Patnaik, who passed away on 25.07.2020 was entitled to receive benefits under various heads in the

Respondent Company. After the death of Sri K.Krishna Shaik Patnaik, who passed away on 25.07.2020 and Smt.Kantimahanti Vijaya Lakshmi, W/o. Late Sri

K.Krishna Shankar Patnaik also passed away on 28.07.2020, Sti Kantimahanti

V.S.Hemanth Kumar and Sri Kantimahanti Vidya Sagar i.e. the petitioners approached the Respondents and submitted the Family Member Certificate

dated 22.10.2020 and 01.09.2020 which was issued by Tahasildar,

Gopalapatnam, Visakhapatnam. The 2nd respondent issued a letter dated 20.10.2020 stated that the petitioners’ father late K.K.S.Patnaik’s death benefits of Rs.66,19,185/- under different heads I.e Gratuity, E.L. Encashment, SL encashments, Provident Fund, GSLI, 2 month HRA etc. i.e. petition schedule and also informed to the petitioners that they are unable to release the death benefits in the absence of nomination due to the petitioners mother demise and has become invalid. As per their record, the petitioners are the sons of the deceased employee, hence the petitioners are advice to obtain succession

Certificate from the Court to enable them to release the petition schedule payments. Hence, they filed the present petition.

3.AGeneralpublicationwasmadein“JusticeToday”

News Paper seeking for objections of any claimants. But, none turned up making any claim.

4.Memo along with affidavit filed on behalf of the Respondents stating that the respondent is not having any objection in grating a succession certificate in favour of the petitioners.

5.During the trial, the first petitioner being the elder son of late K.Krishna

Sankar Patnaik filed his affidavit in chief as P.W.1 and got marked Ex.P1 to Ex.P4.

Second petitioner Kantimahanti Vidya Sagar is examined as PW2 and

Kantimahanti Lakshmana Rao is examined as PW3.

5.Heard on both sides through video conference.

6.Now the point for consideration is:

SOP 01/2021, dt.12.07.2021PSCJC/VSP 4

Whether the petitioners are entitled for a succession certificate as prayed for?

POINT:

7.To prove the contention of the petitioners, the first petitioner examined as

P.W.1 and he reiterated the petition averments in his affidavit in chief. His testimony would disclose that the petitioners are children of Late Kantimahanti

Krishna Shankar Patnaik and Smt.Kantimahanti Vijaya Lakshmi. The father of petitioners worked in Marketing Division, Divisional Office, Visakhapatnam as a

Section Officer II, bearing Employee No.23218 and the said office working under the southern Region, Indian Oil Corporation Limited, Chennai. The petitioners are the permanent residents of Visakhapatnam and both are working in private organizations to eking their livelihood at Hyderabad. Father of the petitioner

K.K.S.Patnaik died on 25.07.2020 at Visakhapatnam, while he was in service in

Indian Oil Corporation at Visakhapatnam Divisional Office and his wife i.e.

mother of the petitioner by name Smt.K.Vijaya lakshmi also died on 28.07.2020 at Gopalapatnam, Visakhapatnam and leaving the petitioners No.1 and 2 as their family members. Both the petitioners are only family members and legal heirs of their deceased parents i.e. Sri Kamtimahanti Krishna Sankar Patnaik and

Smt.Kantimahanti Vijaya Lakshmi. P.W.2 and PW3 also deposed the same on the same lines as stated by the PW1.

8.The petitioners obtained Ex.P1 and Ex.P2 death certificate of petitioners’ father dated 18.08.2020 and death certificate of petitioners’ mother dated 20.08.2020 and Ex.P3 is Family members from the competent authority, they were issued in favour of the petitioners i.e. the first petitioner is the elder son and second petitioner is the younger son of late Sri K.Krishna Sankar Patnaik, who passed away on 25.07.2020 and Smt.K.Vijayalakshmi W/o. Late K.Krishna

Sankar Patnaik also passed away on 28.07.2020 leaving behind the two petitioners as the surviving legal heirs and the Tahsildar, Visakhapatnam, after due enquiry had also issued a Family member certificate dated 22.10.2020.

SOP 01/2021, dt.12.07.2021PSCJC/VSP 5

9. After the demise of Sri K.Krishna Shaik Patnaik, who passed away on 25.07.2020 and Smt.Kantimahanti Vijaya Lakshmi, W/o. Late Sri K.Krishna

Shankar Patnaik also passed away on 28.07.2020 and the petitioners approached the Respondents submitted Ex.P3 the Family Member Certificate

dated 22.10.2020 and 01.09.2020 issued by Tahasildar, Gopalapatnam,

Visakhapatnam. The 2nd respondent issued Ex.P4 letter dated 20.10.2020 and stated that the petitioners’ father late K.K.S.Patnaik’s death benefits of

Rs.66,19,185/- under different heads I.e Gratuity, E.L. Encashment, SL encashments, Provident Fund, GSLI, 2 month HRA etc., and also informed to the petitioners that they are unable to release the death benefits in the absence of nomination due to the petitioners mother demise and has become invalid and to get the succession Certificate from the Court for the dues of late K.K.S.Patnaik succession certificate is required.

10.The respondent company filed memo stating that they have no objection for issuance of succession certificate to the petitioners from the Honoruable

Court.

11.To prove that the petitioners No.1 and 2 are the family members of late

Kantimahanti Krishna Sankar Patnaik as P.W.1 exhibited the original of Family

Member Certificate issued by Tahsildar, Visakhapatnam as Ex.P3. To prove the death of their parents i.e. deceased Kantimahanti Krishna Sankar Patnaik and

Smt.K.Vijayalakshmi W/o. Late K.Krishna Sankar Patnaik, P.W.1 exhibited

Ex.P1and Ex.P2 death certificates.

12. As per the Family Member certificate marked as Ex.P3, the petitioners

No.1 and 2 are the family members of late Kantimahanti Krishna Sankar Patnaik and since the petitioners No.1 and 2 are class-I legal heir of late Kantimahanti

Krishna Sankar Patnaik and since none else has made any claim with regard to the schedule amounts being claimed by the petitioners, this court consider that there is no impediment for issuance of succession certificate as prayed for.

SOP 01/2021, dt.12.07.2021PSCJC/VSP 6

Therefore, this court consider that the petitioners are entitled for succession certificate as prayed for. Thus, this court is answer the above point.

13.In the result, this petition is allowed for issuance of a succession certificate in favour of the petitioners No.1 and 2 in respect of the schedule amounts which are lying in the hands of the respondent company enabling them to entitle to receive schedule amounts i.e. death benefits of late

Kantimahanti Krishna Sankar Patnaik under the head of (1) Gratuity of

Rs.20,00,000/-, (2) E.L.Encashment for an amount of Rs.3,01,418/-, (3)

S.L.Encashment of Rs.4,12,656/-, (4) Provident Fund for amount of

Rs.38,21,017/-, (5) GSLI amount of Rs:50,000/-, (6) Death cover amount of

Rs.5,000/- and (7) 2 months HRA Rs.29,094/- total amount of Rs.66,19,185/-, however subject to payment of required succession duty/charges for engrossing of the Succession certificate within two months.

Typed to my dictation by the Stenographer, corrected and pronounced by me in the virtual conference, this the 12th day of July, 2021.

PRINCIPAL SENIOR CIVIL JUDGE,

VISAKHAPATNAM

APPENDIX OF EVIDENCE

WITNESS EXAMINED

For petitioner:

P.W.1: Kantimahanti Venkata Siva Hemanth Kumar P.W.2: Kantimahanti Vidya Sagar P.W.3: Kantimahanti Lakshmana Rao

For Respondent: NIL

DOCUMENTS MARKED

For Petitioner:

Ex.P1:Original certificate of death of Sri Kantimahanti Krishna Sankar Patnaik issued by Registrar (Birth and Death), Department of Health Medical and Family Welfare, showing the address of the deceased as 5-4/7, F-2, Akshya Residency, Nethaji street, Gopalatnam,GVMC(Part),VisakhapatnamUrban, Visakhapatnam dated 18.08.2020

SOP 01/2021, dt.12.07.2021PSCJC/VSP 7

Ex.P2:Original certificate of death of Smt. Kantimahanti Vijaya Lakshmi issued by Registrar (Birth and Death), Department of Health Medical and Family Welfare, showing the address of the deceased as 5-4/7, F-2, Akshya Residency, Nethaji street, Gopalatnam,GVMC(Part),VisakhapatnamUrban, Visakhapatnam dated 20.08.2020 Ex.P3:Original family member certificate issued by Tahsildar, Gopalapatnam, Visakhapatnam dated 22.10.2020 Ex.P4:Original Letter Ref.No.HR/ER/1441 issued by Respondent Company (Indian Oil Corporation Limited) through DGM (RS)/Vizag do in the name of 2nd petitioner regarding Succession Certificate from the court for dues of Late K.K.S.Patnaik Emp.No.23218 expired on 25.07.2020 dated 20.10.2020

For Respondent: NIL

PRINCIPAL SENIOR CIVIL JUDGE,

VISAKHAPATNAM

SOP 01/2021, dt.12.07.2021PSCJC/VSP 8

I.A.205/2021 in O.S.162/20211PSCJC/VSP

IN THE COURT OF THE PRINCIPAL SENIOR CIVIL JUDGE,

VISAKHAPATNAM

Present: Smt P.Vijaya Durga,

Principal Senior Civil Judge,

Visakhapatnam.

Friday, this the 23rd day of July, 2021

I.A.205/2021 in O.S.No.162/2021

(System Generated No.1/2021 in O.S.162/2021)

Between

Penumaka Chandra Vara Prasad, S/o. Late Mathew, aged 60 years, Retired Employee, resident of D.No.49-38-6, Flat GR1, Royal VR Residency, NGGO colony, Akkayyapalem, Visakhapatnam

...Petitioner/plaintif

A n d:

Palanki Mahalakshmi, W/o. Late Aritakula Satyanarayana Murthy, aged 60 years, Retired Employee, resident of Flat No.101, Dr.Manga Rao, Residency, Railway New Colony, Visakhapatnam.

.. Respondent/defendant

This petition is coming on 19.07.2021 for final hearing before me in the presence of Sri G.D.Prasanna Kumar, Advocate for the petitioner/Plaintif and of Sri S.Arun Dev, Advocate for the Respondent/Defendant, and having stood over to this day for consideration till this day and this Court made the following:

O R D E R

This petition is filed by the petitioner/plaintif under Order 38 R 5 CPC to direct the respondent/defendant to furnish security to the suit amount comes to a tune of Rs.34,00,000/- and if the respondent/defendant fail to furnish such security, pass orders to attach the petition schedule property before judgment.

2.The averments of the sworn affidavit of the petitioner are in the following lines:

(a)The husband of the respondent/defendant Sri Aritakula Satyanarayana

Murthy is a builder by profession and he is best friend of the petitioner/plaintif.

In the first week of September 2019, the respondent/defendant along with her husband Aritakula Satyanarayna Murthy approached him and requested him to arrange an amount of Rs.34,00,000/- in total by way of loan as the respondent/defendant require the said amount to discharge bank debt, for investment in the construction works of her husband, discharge sundry debts

I.A.205/2021 in O.S.162/20212PSCJC/VSP and for family expenses etc. At that time, the respondent/defendant represented to him that he can arrange the said amount of Rs.34,00,000/- by way of cheques from time to time, as and when the respondent/defendant request and after final payment of loan amount, which is being arranged by him, the respondent/defendant will execute promissory note in favour of the petitioner/plaintif. The respondent/ defendant also agreed to repay the said loan amount of Rs.34,00,000/- with interest Rs.2/- per mensum with yearly compound from the last installment payment date within short time.

(b)After agreeing for the said understanding, he made the following payments by way of cheques as detailed below:

1. Cheque bearing No.700689 dated 18.09.2019 drawn on State Bank of

Indian, BHPV Township campus branch for an amount of Rs.6,00,000/-.

2. Cheque bearing No.700690 dated 18.09.2019 drawn on State Bank of

Indian, BHPV Township campus branch for an amount of Rs.6,00,000/-.

3. Cheque bearing No.700691 dated 21.09.2019 drawn on State Bank of

Indian, BHPV Township campus branch for an amount of Rs.7,00,000/-.

4. Cheque bearing No.700692 dated 21.09.2019 drawn on State Bank of

Indian, BHPV Township campus branch for an amount of Rs.7,00,000/-.

5. Cheque bearing No.700693 dated 25.09.2019 drawn on State Bank of

Indian, BHPV Township campus branch for an amount of Rs.4,00,000/-.

6. Cheque bearing No.700694 dated 27.09.2019 drawn on State Bank of

Indian, BHPV Township campus branch for an amount of Rs.2,00,000/-.

7. Cheque bearing No.700696 dated 11.11.2019 drawn on State Bank of

Indian, BHPV Township campus branch for an amount of Rs.2,00,000/-.

(c)As agreed by the respondent/defendant, on 11.11.2019 i.e. at the time of receiving final payment of loan amount arranged by him, the respondent/defendant have executed a promissory note in favour of the petitioner/plaintif at Visakhapatnam specifically mentioning about receiving of total amount of Rs.34,00,000/- as per the above schedule payments agreeing to repay the same with interest at Rs.2/- percent per mensum with yearly

I.A.205/2021 in O.S.162/20213PSCJC/VSP compound from 11.11.2019 to him or his order on demand. On 01.01.2021 the respondent/defendant made a part payment of Rs.15,00,000/- (Rupees fifteen lakhs only) by way of bank transfer to his bank account to State Bank of India,

BHPV Township Campus branch, Visakhapatnam. Inspite of repeated demands made by him, the defendant is not paying the balance of promissory note amount and evading on one pretext or the other. Then, the petitioner got issued registered legal notice dated 15.04.2021 to the respondent/defendant demanding her to pay the entire balance of the promissory note amount with upto date interest within two days of receiving of the said notice. The respondent/defendant received the said notice, but she did not prefer to give any reply or pay the said borrowed amount. He came to know that the respondent/defendant’s husband Aritakula Satyanarayana Murthy died on 12.04.2021 and the respondent/defendant highly indebted to several creditors including him. He came to know that the respondent is proclaiming that she will screen out or create false and fake alienation over her movable and immovable properties with a view to defeat and delay the legitimate debtors including him. As per his information, the respondent/defendant owns any other movable or immovable property except the petition schedule property and he came to know that the respondent/defendant is trying to alienate her petition schedule property in favour of her kith and kin by creating false and fake documents to avoid suit promissory note debt with an intention to delay or defraud the creditors like him and to delay the execution of the decree which will be passed against her. If the respondent succeeds in her attempts, he will sufer huge and irreparable loss and he cannot recover the suit amount even after decree is passed in this suit in his favour. Hence, he filed the present petition.

3.Respondent filed counter and deny the allegations mentioned in the plaint. The averments of the counter are in the following lines:

(a) She has no interest over the petition schedule property and as such the same cannot be attached before judgment. This respondent has no title over

I.A.205/2021 in O.S.162/20214PSCJC/VSP the petition schedule property as the same was sold away by her under a registered sale deed dated 19.04.2021 which was registered as document

No.2167/2021 in the office of Sub-Registrar, Dwarakanagar. She never executed a demand promissory note dated 11.11.2019 for Rs.34,00,000/- (Rupees thirty four lakhs only) as contended by the petitioner. This respondent got issued a notice dated 19.04.2021 to the counsel for the petitioner and the same was received at their end. She is not liable to pay any amount to the petitioner much less the suit amount under the foot of the demand promissory note filed along with plaint. This respondent never received any consideration under the same. The legal notice got issued by the petitioner is riddled with inconsistencies as at one point the petitioner states that the promissory note was executed by this respondent and her husband and later on he states that the demand promissory note was executed by this respondent alone which clearly shows that the suit promissory note is fabricated and forged without any consideration being passed under the same. Her deceased husband was addicted to vices being a chronic alcoholic and was not in good health for the past 3 years. The petitioner might have manipulated this respondent’s husband to obtain some forged documents including the fabricated and forged suit promissory note.

(c) This respondent emphatically states that she never executed any demand promissory note in favour of the petitioner and she did not receive any consideration from the petitioner under said promissory note. This respondent used to work as Personal Assistant to Senior Divisional Engineer, DRM Office,

East Coast Railway and she has no need or necessity to borrow money from the petitioner and she being issueless her needs were very limited and the petitioner being an employee never was into any business.

(d)The respondent agreed to sell away the property to Dr.P.venkateswarulu during the year 2017 and accordingly received major pay of the sale consideration on 14.03.2017 and 15.03.2017. Upon the request of said

Dr.P.Venkateswarulu, this respondent executed a registered sale deed dated

I.A.205/2021 in O.S.162/20215PSCJC/VSP 19.04.2021 in the manner aforesaid conveying the house property to him with absolute rights. Therefore, this respondent has no property and the petition schedule property cannot be attached as the same does not stand in the name of this respondent. Hence, she pray the honourable court to dismiss the petition.

04.During the course of enquiry, no oral or documentary evidence is adduced on either sides.

05.Heard both sides through virtual conference.

06.Now the point for consideration is:

Whether the petitioner is entitled to allow the petition as

prayed for?

POINT:

07. This petition is filed by the petitioner for attachment of the petition schedule property before judgment. The case of the petitioner is that husband of the respondent is best friend to the petitioner and respondent approached the petitioner and requested to arrange an amount of Rs.34,00,000/- by way of loan for investment in the construction works and to discharge sundry debts, accordingly he given amounts by way of cheques. The respondent executed promissory note in favour of the petitioner for Rs.34,00,000/- (Rupees thirty four lakhs only) agreeing to repay the interest @ 2% per annum with yearly compound from 11.11.2019 on his demand. The respondent made part payment of Rs.15,00,000/- by way of bank transaction, thereafter she did not pay any amount. The petitioner issued a notice and filed present suit and filed present petition for attachment of the property showing that the respondent indebted to several creditors. He came to know that the respondent created false and fake alienation over her movable and immovable properties with a view to defeat and delay creditors. The respondent owns movable or immovable property, except the petition schedule property and he came to know that the respondent trying to alienate petition schedule property in favour of her kith and kin by creating false and false documents to avoid suit

I.A.205/2021 in O.S.162/20216PSCJC/VSP promissory note.

08.The respondent stated that the petition schedule property is not belongs to the respondent and she has no interest over the petition schedule property and she has no title over the property. The petition schedule property was sold under registered sale deed dated 19.04.2021 vide document No.2167/2021 in the office of Sub-Registrar, Dwarakanagar and denied the execution of the promissory note. The petitioner filed statement of Encumbrance Certificate of property from 21.04.1991 to 16.04.2021. The case of the respondent is that the petition schedule property was sold under registered sale deed dated 19.04.2021. During the arguments, the petitioner counsel also admits about the registered sale deed, which was executed by the respondent on 19.04.2021.

He stated that to avoid payment of amounts, she intentionally executed sale deed without consideration. The suit was filed by the petitioner on 26.04.2021, the transaction of the schedule of property took place i.e. sale deed on 19.04.2021 i.e. prior to filing of the suit. As on the date of filing of the petition and suit, the petition schedule property was not in the name of the respondent.

The respondent has no right and title over in the petition schedule property.

Hence, the petition schedule property cannot be attached. Hence, this point is answered accordingly.

09. In the result, this petition is dismissed.

Typed to my dictation to the Stenographer, corrected and pronounced by me in virtual conference this the 23rd day of July, 2021.

Principal Senior Civil Judge,

Visakhapatnam.

Appendix of evidence

For petitioner/plaintiff: For Respondents/Defendants:

No oral or documentary evidence adduced on either sides

Principal Senior Civil Judge,

Visakhapatnam.

I.A.205/2021 in O.S.162/20217PSCJC/VSP