Punjab & Haryana High Court Acquits Two LIC Employees in Cheque Fraud Case, Censures Investigation for Lack of Evidence Linking Accused

Case Name: Raju v. State of Punjab and Avtar Singh @ Lucky v. State of Punjab
Date of Judgment: January 6, 2015
Citation: CRR No. 1158 of 2014 (O&M) & CRR No. 2141 of 2014 (O&M)
Bench: Hon’ble Mr. Justice Kuldip Singh

Held: The Punjab & Haryana High Court set aside the convictions of two Life Insurance Corporation (LIC) employees accused of forging cheques and opening fictitious bank accounts to encash policy payments, holding that the prosecution had completely failed to establish their guilt beyond reasonable doubt. Justice Kuldip Singh observed that the case was a “complete investigative failure,” as the investigating officer lacked the skill to handle white-collar crime and failed to collect even basic documentary evidence such as withdrawal slips, handwriting comparisons, or proof linking the accused to the alleged fraudulent accounts. The Court ruled that conviction cannot rest on conjectures, presumptions, or the mere presence of a photograph on an account-opening form, and reiterated that criminal liability must be proven through direct, cogent evidence.

Summary: The prosecution alleged that Avtar Singh and Raju, both working as assistants to a Development Officer in the LIC Jalandhar branch, had stolen cheques issued to LIC policyholders and encashed them by opening fictitious accounts at the Citizen Urban Cooperative Bank, Jalandhar. FIR No. 241 dated September 9, 2006, was registered under Sections 420, 380, 465, 467, and 468 read with Section 34 IPC. Upon arrest, Avtar Singh was found with a cheque book of a fictitious account, and the prosecution contended that the accused had jointly managed multiple fraudulent transactions.

However, Justice Kuldip Singh noted that the evidence failed to connect the accused to the encashment. Policyholder Nirmal Singh (PW1) confirmed that his cheque of ₹41,862 had been encashed fraudulently, but he was not present during withdrawal and did not identify either accused. The Court observed that no record showed who deposited or withdrew the amount, and the investigating agency failed to examine withdrawal forms or compare signatures. Though one account-opening form bore a photograph of Raju, the Court held that this could not suffice for conviction, especially since a copy of a passport bearing the same photograph was also attached, indicating possible identity theft.

The Court found that several fictitious accounts—purportedly in the names of Nirmal Singh, Sushil Marwaha, Ashok Kumar Dang, and Jashandeep Singh—were opened using supporting documents like ration cards and passports, but there was no evidence that either accused procured or used them. The trial court and appellate court had both relied on presumptions rather than proof, holding the accused guilty merely because they were LIC employees and their names surfaced in the investigation.

Decision: The High Court held that both convictions were unsustainable, describing the prosecution case as “sketchy, presumptive, and unsupported by reliable evidence.” It accordingly set aside the judgments dated November 8, 2011, and March 12, 2014, acquitted both Raju and Avtar Singh @ Lucky of all charges under Sections 120-B, 420, 465, 467, and 468 IPC, and directed their immediate release if not required in any other case.