Authority: High Court of Judicature at Madras

Order Date: 19 August 2026

Case Overview

  • Appellants: M.K. Natarajan (Senior Manager, Finance & Accounts, Salem Steel Plant), P.G. Anbanantham (Cashier, Central Marketing Office, SAIL, Chennai) and D. Sukumar (Project Manager, Polaris Software, Navalur, Chennai).
  • Respondent: State represented by Inspector of Police, CBI/ACB, Chennai (RC MA1 2011 A 2025).
  • The appeals (Criminal Appeals Nos. 793, 796 & 811 of 2017) sought to set aside the conviction dated 08‑12‑2017 passed by the II Additional District & Sessions Judge, CBI Cases, Coimbatore in Special C.C.No. 1 of 2012.
  • Allegations: Unauthorised RTGS transfers amounting to approximately Rs 99,60,172 (≈ Rs 99.6 million) were made from the bank account of Salem Steel Plant (SSP) to personal accounts of the three accused during Q1 FY 2010‑11.
  • Detailed breakdown of transfers alleged by prosecution: Rs 24,00,851 to the 1st accused, Rs 40,20,960 to the 2nd accused and Rs 35,38,361 to the 3rd accused.
  • Evidence presented by prosecution included 30 oral witnesses (P.W.1‑P.W.30), 144 exhibits (Ex.P1‑Ex.P144), and two material objects (M.O.1, M.O.2). No defence witnesses or documentary evidence were produced.
  • The trial court convicted all three under IPC §§120B r/w 409, 465, 467, 468, 471, 477A and under the Prevention of Corruption Act, 1988 (PC Act) §§13(2) r/w 13(1)(c)&(d).
  • Sentences imposed by the trial court: three years rigorous imprisonment (RI) for each IPC charge, one year simple imprisonment (SI) for sections 465, 471 and PC Act, fine of Rs 1,000 for each charge, and a default one‑month SI.
  • Defence contentions: the FIR was filed after the 1st accused had voluntarily repaid the entire amount between 05‑05‑2011 and 07‑05‑2011; the internal audit function at SSP was ineffective; the RTGS letters were part of a mock exercise to test audit effectiveness; the accused acted in good faith and lacked mens rea; the 2nd and 3rd accused had no knowledge of the transactions and merely returned the amounts after deducting loan interest.
  • Defence also argued lack of chain of custody for key exhibits (Ex.P106‑Ex.P114) and improper acquisition of specimen signatures (Ex.P116) without court permission under Cr.P.C. 311A.
  • Prosecution rebuttal: forged RTGS letters (Ex.P8‑Ex.P16) were prepared by the 1st accused, signatures of senior finance officers (P.W.8, P.W.9, P.W.10) were forged, and the forged documents were used to obtain bank releases; repayment does not extinguish criminal liability.
  • Evidence from senior officials (P.W.8‑P.W.10) confirmed that signatures on the RTGS letters were not genuine and that the format of the letters deviated from prescribed norms.
  • Expert reports (Ex.P103‑Ex.P118) corroborated the forging and fabrication of the RTGS letters and the illegal withdrawal of funds.
  • The Court examined precedents: Sukh Ram v. State of Himachal Pradesh (2016 SC 584), Karandeep Sharma alias Razia alias Raju v. State of Uttarakhand (2025 SCC Online SC 773), and N. Raghavender v. State of Andhra Pradesh, CBI (CDJ 2021 SC 1052).

Final Outcome

  • The High Court confirmed the conviction of all three appellants, finding the prosecution’s case substantiated and the defence arguments unpersuasive.
  • While upholding the conviction, the Court exercised discretion to modify the sentence: the three‑year rigorous imprisonment imposed by the trial court was reduced to one year rigorous imprisonment for each appellant, taking into account their age and the circumstances of the case.
  • The fines of Rs 1,000 each and the default one‑month simple imprisonment remain as ordered.
  • The appeals are therefore partly allowed: conviction stands, sentence reduced.

Topics: Criminal Law, Corruption