Conviction for criminal conspiracy requires proof of agreement; mere suspicion or procedural irregularities are insufficient.

The Appellant (A2), proprietor of M/s Jayvee Sales Corporation, was accused of entering into a criminal conspiracy with a Senior Manager of UCO Bank (A1) between 1989 and 1990.

It was alleged that A1 facilitated the clearance of cheques and issuance of demand drafts for A2 without debiting A2’s account, despite a debit balance, causing a loss of ₹16 lakhs to the bank.

While the trial court dropped the charge of cheating (Section 420 IPC) in 1994, it convicted A2 in 2003 for criminal conspiracy under Section 120B IPC read with Section 13(1)(d) and 13(2) of the Prevention of Corruption (PC) Act.

During the trial in 2000, the parties settled the financial dispute before the Debt Recovery Tribunal (DRT), and the bank certified that the debt was fully satisfied.

Co-accused A1 died during the pendency of the appeal.

The court applied Section 120B of the IPC, which requires an agreement between two or more persons to commit an illegal act or a legal act by illegal means, necessitating a "meeting of minds".

It further considered Section 13(1)(d) of the PC Act regarding criminal misconduct by a public servant.

The court relied on the precedent in State v. Uttamchand Bohra, which holds that conspiracy cannot be inferred from mere suspicion or conjectures and requires clear evidence of an agreement.

Regarding sentencing, the court followed State of Madhya Pradesh v. Vikram Das, which mandates that statutory minimum sentences cannot be reduced even under extraordinary judicial powers.

The court reasoned that since the Section 420 IPC (cheating) charge was dropped at the outset, the essential elements of dishonest inducement and wrongful gain were absent, leaving the alleged conspiracy without a clear unlawful object.

It observed that the prosecution relied primarily on the sequence of transactions, which did not sufficiently prove a prior agreement or meeting of minds between A1 and A2.

The court noted that evidence of heavy workload and staff shortages at the bank branch suggested that the non-debiting of cheques was likely a procedural irregularity or administrative lapse rather than a criminal design.

Because the financial liability was fully settled through the DRT and the bank was compensated, the court found that the "live issue" of criminality had significantly diminished.

Ultimately, the court determined that the prosecution's case rested on suspicion, which cannot substitute for legal proof.

It held that procedural irregularities in banking, without proof of prior agreement, do not constitute conspiracy.

The High Court allowed the appeal, set aside the trial court's judgment and order on sentence, and acquitted the appellant (A2) of all charges under Section 248(1) Cr.PC.