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The AECO transferred its licences for the supply of electrical energy to the consumers of Visakhapatnam to VESCO and similarly transferred to AECO the licence to supply electrical energy to consumers at Anakapalli FAC |
The AECO was appointed Managing Agent for each of these corporations under separate agreements FAC |
Some time later other industrial concerns, the Andhra Cements Ltd., Vi jayawada and the East Coast Ceremics FAC |
Rajahmurthy were started apparently by Raju himself- and the AECO was appointed the Managing Agent of each of these concerns FAC |
The original managing agency agreement in favour of AECO with respect to VESCO was for a period of 15 years i.e., from 1933 to 1948 and was later renewed for the remaining term of the currency of the licence granted by the Government under the Electricity Act FAC |
A mention may be made of the fact that in June, 1952 the VESCO undertaking was acquired by the Government under the provisions of the "'Electricity Undertaking Acquisition Act" but nothing turns on it FAC |
The VESCO had its own Board of Directors while the AECO had also its own separate Board of Directors FAC |
The VESCO had no Managing Director but at each meeting of its Board of Directors one of the Directors used to be elected Chairman FAC |
The same practice was followed at the meeting of the general body of the shareholders FAC |
The AECO on the other band always had a Managing Director, first of whom was D.L.N. Raju FAC |
He died in the year 1939 and was succeeded by R.K.N.G. Raju, an Advocate of Rajahmundry FAC |
This person, however, did not shift to Visakhapatnam on his becoming the Managing Director but continued to stay most of the time at Rajahmundry FAC |
According to the prosecution both these concerns were running smoothly and efficiently during the lifetime of D.L.N. Raju because he was personally attending to their affairs ARG |
His successor, however, apart from the fact that be continued to be staying mostly at Rajahmundry, was also interested in several other ventures, including a sugar factory at Dewas in Central India ARG |
Eventually many of those ventures failed ARG |
According to the prosecution the second Raju was not bestowing sufficient care and attention on the affairs of VESCO ARG |
The AECO as Managing Agents of VESCO had appointed in the year 1939 one D.V. Appala Raju, a trusted employee, as its representative and as the secretary of VESCO FAC |
In 1944 this person resigned from his appointments and started his own business in radio and electrical goods in the name of D. Brothers FAC |
He was succeeded by T. Visweswara Rao, P.W. 6, an employee of the AECO FAC |
The respondent No. 1 Ratio |
Ganeswara Rao was also an old employee of AECO, having been appointed a stenotypist in the year 1923 on an initial salary of Rs Ratio |
p.m Ratio |
Eventually he became the Head Clerk therein Ratio |
He pressed his claim for appointment as Secretary of VESCO and representative of the Managing Agents at Visakhapatnam and R .H.G Ratio |
Raju appointed him to that post Ratio |
All this is not disputed Ratio |
The respondent No. 1, even after his appointment on two posts connected with VESCO, continued to work with the AECO also whose business had by then been confined only to that of Managing Agents of the four companies floated by D.L.N. Raju Ratio |
It is the prosecution case that as Secretary of VESCO and the resident representative of the Managing Agents, the respondent No ARG |
I was attending to the day to day affairs of VESCO, which included the receiving of all sums of money due to VESCO, spending money for the purpose of VESCO attending to the appointment, supervision and control of the staff of VESCO, purchasing materials required for the purpose of VESCO and supervising over the account... |
He was thus all important with respect to the every day affairs of VESCO ARG |
His dual capacity enabled the respondent No ARG |
I to earn the confidence not only of the Directors of AECO but also of those of VESCO ARG |
The accounts maintained by the VESCO used to be explained by him not only to the Directors but also to the shareholders ARG |
The knowledge of the Financial position of VESCO obtained by them used to be derived essentially from the respondent No. 1 ARG |
As Secretary of VESCO it was his duty to convene the meetings of the Board of Directors, to present before them the periodical statement of receipts and expenditure of VESCO, to convene meetings of the General Body, to prepare the Managing Agents' report and the Director's report as also to see to the presentation of a... |
The explanations of the Managing Agents and the Directors of VESCO with respect to the items mentioned in the orders of the Board used also to be placed by him before the shareholders ARG |
It was also his duty to have the accounts of VESCO audited by the auditors elected by the general body and to produce before the auditors the relevant accounts, vouchers, bank statements and so on ARG |
There were no complaints about the management of the affairs of VESCO or the AECO till the end of 1946 or the beginning of 1947 ARG |
One significant fact, however, which occurred prior to 1946 - is referred to by the prosecution ARG |
Till the -year 1945 Messrs C. P. Rao & Co., a firm of Chartered Accountants were the auditors of VESCO but after the respondent No ARG |
I became Secretary ARG |
one B. Rajan was elected Auditor not only for VESCO but for all the other four concerns, including AECO ARG |
This person was Auditor for Greenlands Hotel at Visakhapatnam ARG |
of which the respondent No ARG |
I was a Director ARG |
R.K.N.G. Raju took till towards the end of 1947 and died at Madras in April, 1948 ARG |
According to the prosecution the respondent No. I wanted to take advantage of this fact and conceived of a scheme for misappropriating as much money belonging to VESCO as possible before the managing agency agreement of AECO came to an end in October, 1948 ARG |
I secured the promotion of the approver K.V. Ramana, who was originally Accounts Clerk to the post of Senior Accountant ARG |
Similarly K. V. Gopala Raju was transferred from the post of Stores Clerk to the general department and K.S.N. Murty, the discharged accused, was appointed Stores Clerk in his place ARG |
Later, however, Murty was also got transferred to the general section and replaced by P. W. 18 ARG |
Srinivasa Rao originally a stores boy ARG |
The approver who was originally an Accounts clerk with the AECO was, it may be mentioned, appointed a cashier in VESCO in 1946 at the instance of the respondent No ARG |
I and was thus beholden to him ARG |
He was later promoted as Senior Accountant and in his place the respondent No. 2 ARG |
Laksbminarayana Rao was appointed the Cashier ARG |
According to the prosecution the respondent No ARG |
I took both the approver and Lakshminarayana Rao in his confidence as also some other persons "known and unknown" for carrying out his nefarious purpose, namely, the misappropriation of the funds of VESCO during the subsistence of AECO's managing agency of VESCO ARG |
The conspiracy is said to have been hatched in the year 1947 and falsification of accounts and misappropriation of funds of VESCO went on till the end of the accounting year ARG |
The term of the managing agency was renewed in 1943 and AECO con- tinued to be managing agents until the VESCO was taken over by the Government in 1952 ARG |
I continued to be the Secretary of VESCO and resident representative of the Managing Agents throughout the period of conspiracy ARG |
After the death of R.K.N.G. Raju, it was discovered that the AECO was indebted to many concerns which were under its managing agency, the liability being shown either as that of AECO or that of R.K.N.G. Raju personally ARG |
Again, the VESCO was shown as indebted to the Andhra Cement, ; to the extent of Rs ARG |
42, 000 ARG |
This amount was, however, paid by the AECO from the funds of VESCO ARG |
I and some of his friends were in search of a rich and substantial man who would be amenable to them to fill the post of Managing Director of AECO ARG |
Eventually their choice fell on G. V. Subba Raju, P. W. 25, a resident of Manchili, who held a large number of shares in the AECO and who was, besides, related to R.K.N.G. Raju by marriage FAC |
It is said that this person has not received much education and knows only bow to sign his name in English FAC |
He was assured that by consenting to become the Managing Director be would not be required to discharge onerous duties and that the respondent No FAC |
I would look to all the affairs of VESCO FAC |
He was also told that apart from signing important papers which may be sent to him by the respondent No. I from time to time to Manchili or wherever be might be would have no work to do FAC |
He agreed and was elected Managing Director of AECO in the middle of 1948 FAC |
Upon this understanding he accepted the position offered to him FAC |
The VESCO used to receive large amounts of money from high tension power consumers such as the railways, K. G. Hospital, the Port Administration, the Andhra University etc FAC |
by cheques FAC |
But domestic consumers usually paid their bills in cash to the bill collectors who used to hand over their collections to the respondent No. 2 FAC |
The respondent No. 2 was asked by the respondent No FAC |
I to maintain a private note book FAC |
In "that book payments which used to be made by respondent No. 2 on the basis of slips issued by the respondent No FAC |
I used to be noted and the amount totalled up at the end of the day FAC |
This amount was posted in VESCO's Cash Handover Book as "'by safe" indicating that this amount was kept in the safe, though in fact it was not FAC |
On the basis of the entries in the Handover Book the final accounts were written up FAC |
I opened four personal accounts in different banks, including the Imperial Bank of India FAC |
When the respondent No FAC |
I had to issue a personal cheque on any of these Banks he used to ask the second respondent to send an equivalent amount to the Bank concerned for being credited to his account FAC |
These amounts also used to be noted in the private note book and entered FAC |
Another thing which the respondent No FAC |
I initiated was opening a heading in the ledger called "advance purchase of materials FAC |
Amounts which had been misappropriated used to be posted therein though in fact no orders were placed for any material FAC |
It may be mentioned that Subba Raju used to visit Visakhapatnam twice a month and check up the account books FAC |
At that time it used to be represented to him that the amounts which were shown to be in the safe and not found therein had been sent to the Bank for being deposited FAC |
Apparently Subba Raju was fully satisfied with this and other explanations and, therefore, he appointed one C. S. Raju, who was the Manager of Andhra Cements to supervise over the affairs of VESCO.Apparently because of this a new method of misappropriation was adopted by the respondents by starting in the VESCO account... |
A lakh of rupees passed through that account FAC |
Amounts which were misappropriated used to find their way in this account FAC |
A new cash book was also said to have been prepared by the conspirators with the object of covering up the misappropriations which had been made FAC |
Subba Raju was not satisfied with the nature of supervision exercised by C. S. Raju over the affairs of VESCO because he used to look only at the cash book entries of the days on which he paid visits to VESCO's office, to which he used to go with previous intimation FAC |
Besides that, C. S. Raju's management of Andhra Cements had landed it into a loss of Rs FAC |
30, 000 FAC |
Because of all these things he had C. S. Raju replaced towards the end of the year 1951 by one Subbaramayya, a retired Finance Officer from the Madras Electricity Board both as a Director of Andhra Cements and as a Supervisor over the accounts of VESCO FAC |
Subbaramayya took his work seriously and called for information on a number of points from the respondent No. 1 FAC |
He, however, was unable to obtain any information FAC |
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