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of <h1>Accused convicted in financial fraud case involving Harshad Mehta funds</h1> <h3>R. Venkatakrishnan Versus Central Bureau of Investigation</h3> The court found the accused guilty of criminal conspiracy and breach of trust related to diverting funds to Harshad Mehta's account. It upheld ... Whether the ‘transfer’ was illegal within the meaning of section 43 of the Indian Penal Code in the light of the provisions of section 14 of the NHB Act? Held that:- As per the law laid down it is therefore to hold that the accused Nos. A1 to A3 [officials of UCO Bank] & A6 [officials of NHB] are guilty of criminal misconduct under the Prevention of Corruption Act. For the reasons already mentioned no sufficient evidence find to bring in the involvement of A7, Suresh Babu within the fold of the said transaction. All the accused were at the relevant time public servants. Each one of them played a specific role in diversion of funds from NHB to the account of Harshad Mehta, all ostensibly under a call money transaction. They thereby in our opinion facilitated Harshad Mehta to obtain pecuniary advantage within the meaning of the section. The acts were anything but intended to be in public interest. On the contrary the public loss and suffering occasioned thereby was immeasurable. Thus to hold accused Nos. A1 to A3 and A6 guilty of criminal misconduct under section 13(1)(d)( iii) of the Prevention of Corruption Act. Issues Involved:1. Criminal conspiracy2. Criminal breach of trust3. Jurisdiction of the Special Court4. Validity of sanction orders5. Reliance on the Janakiraman Committee report6. Charges under the Prevention of Corruption Act7. SentencingDetailed Analysis:1. Criminal ConspiracyThe prosecution alleged that the accused, including bank officials and Harshad Mehta, conspired to divert funds from the National Housing Bank (NHB) to Harshad Mehta's account at UCO Bank. The court found that:- The transaction was not a genuine call money transaction but a subterfuge to provide funds to Harshad Mehta.- Evidence showed that the accused had knowledge of the transaction and participated in it.- The court relied on testimonies and documentary evidence to establish that the accused facilitated the illegal transfer of funds, thereby proving the conspiracy.2. Criminal Breach of TrustThe court held that the accused were guilty of criminal breach of trust under Section 409 of the IPC:- The accused, being public servants, misappropriated the funds entrusted to them.- The funds meant for call money were illegally transferred to Harshad Mehta's account.- The court emphasized that the misappropriation was done with dishonest intent, fulfilling the criteria for criminal breach of trust.3. Jurisdiction of the Special CourtThe court addressed the issue of jurisdiction, noting:- The Special Court was established to try offences related to transactions in securities.- The definition of 'securities' under the Special Court Act is inclusive and broad.- The court concluded that the Special Court had jurisdiction as the transactions were related to securities and involved public funds.4. Validity of Sanction OrdersThe validity of sanction orders for prosecuting public servants was challenged:- The court upheld the sanction orders, stating that the competent authorities had issued them.- Even if there were errors in the sanction orders, Section 19(3) of the Prevention of Corruption Act protects against reversal of conviction unless there is a failure of justice.5. Reliance on the Janakiraman Committee ReportThe court found that:- The Janakiraman Committee report was not admissible as evidence in a criminal trial.- The report was a fact-finding document and not a judicial decision.- The court should not have relied on the report for convicting the accused.6. Charges under the Prevention of Corruption ActThe court found the accused guilty under Section 13(1)(d)(iii) read with Section 13(2) of the Prevention of Corruption Act:- The accused, as public servants, obtained pecuniary advantage for Harshad Mehta without any public interest.- The court held that the actions of the accused amounted to criminal misconduct.7. SentencingThe court considered various factors in sentencing the accused:- The sentences ranged from 15 days to three years of rigorous imprisonment, with fines imposed.- The court took into account the roles of the accused, their age, and health conditions.- The sentences of imprisonment were reduced for some accused, while fines were upheld.Conclusion1. A1, K. Margabanthu: Six months RI, fine of Rs. 1,00,000.2. A2, R. Venkatkrishnan: Six months RI, fine of Rs. 1,00,000.3. A3, S.V. Ramanathan: One month RI, fine of Rs. 10,000.4. A5, Atul M. Parekh: 15 days RI, fine of Rs. 10,000.5. A6, C. Ravikumar: Six months RI, fine of Rs. 1,00,000.6. A7, S. Suresh Babu: Acquitted of all charges.Each accused was given a set-off for the period already undergone in imprisonment, and a period of two months was granted to pay the fines.
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