TaxTMI 
TaxTMI 
2009 (8) TMI 693
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....s sentenced to undergo R.I. for three months and to pay fine of Rs. 50,000, in default S.I. for 15 days. (c)Accused No. 4, Ashwin Mehta was sentenced to undergo R.I. for a period of three months and to pay fine of Rs. 2,00,000, in default S.I. for one month. (d)Accused No. 5, Sudhir Mehta was sentenced to undergo R.I. for a period of three months and to pay fine of Rs. 2,00,000, in default S.I. for one month. (e)Accused No. 6, Munipally Subramanium Eshwar Chandra, Accused No. 7 Sunil Samtani, Accused No. 9 Pankaj Brijlal Shah were directed to pay fine in the amount of Rs. 25,000 each, in default S.I. for 15 days. (f)Accused No. 8, S.V. Ramanathan was sentenced to undergo R.I. for a period of one month and to pay fine of Rs. 25,000 in default R.I. for 15 days. 2. Before proceeding further, we may place on record, that Harshad Shantilal Mehta (Original Accused No. 3) expired during the pendency of the criminal proceedings and the case against him, thus, abated. Accused Nos. 1, 2 and 8 who are appellants in Criminal Appeal Nos. 945, 965 and 922 of 2005 respectively were the Chairman-cum-Managing Director, the General Manager and the Divisional Manager of UCO Bank respec....
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.... General Manager (PW 44), Shri Bhaskar Roy Choudhary, Dy. General Manager (PW 45), Shri Ramanathan, Divisional Manager (Accused No. 8) and Shri R.L. Joshi, Public Relations Officer (PW 7) participated. 9. Accused No. 1 allegedly informed others that he had met Harshad Mehta who had suggested that it would be in the interest of the Bank to undertake the business of discounting and rediscounting of Bills of Exchange. The officers present were assured by him that the business could be transacted without involving the banks' funds. He furthermore insisted that the said business be undertaken through the Nariman Point Branch of the Bank though such transactions were generally not undertaken therefrom. In course of the meeting, Accused No. 1 contacted Accused No. 2 R. Venkatkrishnan at Calcutta and informed him about the transactions which had to be carried out. On the other officers of the Bank objecting thereto, Accused No. 1 assured them that the business of discounting and rediscounting of Bills of Exchange would be personally looked after by Harshad Mehta himself. 10. On the same day, that is, on 14-3-1992, a resolution was passed by M/s. Growmore Research and Asset Management....
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....th respect to the underlying security transaction had not been produced and only a photocopy thereof had been produced. 16. Letters were also issued by Mazda and Growmore to the effect that the said amount would be repaid by them on or before 24-4-1992. They had asked the Bank in writing to issue cheques in the name of ANZ Grindlays Bank. 17. For the said two cheques receipts were obtained from Syndicate Bank and State Bank of Patiala. The two usance promissory notes were handed over to Accused No. 7 and Accused No. 9. Indisputably, J.H. Mehta, the drawer of the Bills of Exchange did not have any account in his name. The acceptors, namely, Mazda and Growmore also did not have any account at the said branch. 18. Two draft promissory notes were handed over to Mr. Prabhu (PW 44) by Accused Nos. 7 and 9; one issued in favour of Syndicate Bank and the other in favour of State Bank of Patiala to be executed by UCO Bank in relation to the said cheques. Those usance promissory notes were signed by Mr. Prabhu (PW 44) and Ranjit Mukherjee (PW 1), pursuant whereto the Bank issued two pay orders on the same day in favour of ANZ Grindlays Bank for a sum of Rs. 25,27,00,000 and Rs. 14,1....
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....ank thereafter visited the offices of Mazda and Growmore for realization of the payments due. Two cheques were handed over by M/s. J.H. Mehta with a request that the same not be encashed and that the cheques of Growmore and Mazda would be given at a later date. Mazda and Growmore also issued two cheques. They were not sent for clearing as the requisite funds therefor were admittedly not available in their accounts in Grindlays Bank. The said two Bills of Exchange, for want of fund, were not retired either by M/s. J.H. Mehta or Growmore or Mazda. 22. Subsequent thereto, a formal meeting of the Investment Committee consisting of Accused Nos. 1 and 3 and PW 45 was held. At the instance of Accused Nos. 1 and 3, shares of Gujarat Ambuja Cement worth Rs. 50 crores were purchased by UCO Bank. It was routed through V.B. Desai a broker and an amount of commission for a sum of Rs. 9.53 lakhs was paid to him. The amount received by J.H. Mehta from UCO Bank under the said transaction was transferred by him to Mazda and Growmore so as to facilitate encashment of the said cheques for retiring the Bills of Exchange. Payment towards purchase of shares was made by UCO Bank before delivery thereo....
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....committing criminal breach of trust and entering into a criminal conspiracy, and the accused Nos. 4, 5, 6, 7 and 9 are charged with the offence of criminal conspiracy." Evidence 27. The prosecution in support of its case examined a large number of witnesses. The defence also examined some witnesses. Ashwin Mehta (Accused No. 4) also examined himself in defence. 28. A large number of documents were also brought on record by the parties. We would refer to some of them at an appropriate stage. Proceedings before the Special Court 29. Before the Special Court it was alleged that the original contract note with respect to the underlying security transaction for the discounting of Bills had not been produced at the time of entering into the said transactions and only a photocopy thereof was produced. It was furthermore alleged that no security was insisted upon for discounting the Bills of Exchange and before signing the promissory notes, the Bank did not have with it the shares in relation to which the Bills of Exchange were drawn. The said acts of omission and commission on the part of Accused Nos. 1, 2 and 8 are said to be in violation of the UCO Bank Manual of Instruct....
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....H. Mehta and accepted by two corporate entities, Growmore and Mazda. (ii)The said discounting of bills was illegal as it violated the Circular issued by the Reserve Bank of India dated 5-9-1988 (Exhibit 247); and by reason thereof, a sum of Rs. 50 crores was transferred to the deceased accused No. 3 Harshad Mehta and/or his groups. (iii)The transactions having been carried out in violation of the aforementioned Circular dated 5-9-1988 issued by the Reserve Bank of India, the accused Nos. 1, 2 and 8 having acted contrary thereto or inconsistent therewith, the same constituted an offence within the meaning of section 405 of the Indian Penal Code. (iv)The said transactions having been carried out to benefit Harshad Mehta Group of Companies by the accused in conspiracy with each other, the prosecution has proved its case. The private accused as well as Accused No. 8 were convicted only for commission of the offence of criminal conspiracy. Submissions 35. The learned counsel appearing on behalf of the appellants, inter alia, would urge : (i)The transactions being related to discounting and rediscounting of Bills of Exchange and not to securities, the Special Court had ....
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....ted a serious error in passing the impugned judgment. It suffers not only from misreading and misconstruction of the evidences but also in taking note of the deposition of the witnesses examined on behalf of the defence. (x)Accused No. 1 being the Chairman-cum-Managing Director of the Bank having taken a decision to transact business with Harshad Mehta in the interest of the Bank whose reputation and creditworthiness in those days being unquestionable and particularly in view of the fact that even the prosecution witness accepted that he was respected by all concerned, the inference that the transaction was not entered into bona fide is wholly unsustainable. (xi)The learned Special Judge committed a serious error in arriving at a finding that no contract had been entered into by and between the Banks as it has categorically been accepted by Shri Prashant D. Patel (P.W. 17), that a contract was entered into. In any event, a contract, it is well known, can be entered into by necessary implication. (xii)The learned Special Judge committed a serious error in holding that accused No. 5 was Director of the Company although in fact he was merely an employee. (xiii)Even assumin....
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....had Mehta on 13-3-1992, resolutions were passed by Growmore and Mazda for opening accounts with a view to obtaining Rs. 50 crores from the Bank. Transactions were shown to have been entered into between M/s. J.H. Mehta on the one hand and Mazda and Growmore on the other, purporting to sell shares worth Rs. 50 crores on 20-3-1992; on the strength whereof two Bills of exchange were prepared by M/s. J.H. Mehta and purported to have been accepted by Growmore and Mazda. The same were presented to UCO Bank, Nariman Point Branch for discounting. The said Bills of Exchange were not accompanied by the original credit note relating to the alleged sale transaction of share securities. The Bills of Exchange were discounted and payment of Rs. 50 crores was made. The accounts for facilitating the said bill discounting had been opened on the same day. No verification as per the required procedure was undertaken. (d)No security was taken even before the Bills of Exchange were discounted, although rediscounting had been carried out by two other Banks. Even the usance promissory notes for rediscounting was issued by the UCO Bank much later. (e)When there was default in retiring the Bills of Ex....
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....cate Bank and State Bank of Patiala, although were not per se securities but as by reason thereof liability to pay interest had been cast on UCO Bank. (j)Accused No. 6 being Chief Executive of Mazda, Accused No. 7 being Vice President of Mazda and Accused No. 9 being Vice President of Growmore, they were also party to the conspiracy for commission of the offence of criminal breach of trust. Jurisdiction of the Special Court 37-38. The history as regards constitution of the Special Courts has been noticed by us heretobefore. Its jurisdiction, inter alia, is confined to trial of offence relating to transactions in securities and for matters connected therewith or incidental thereto committed during the period between 1-4-1991 and 6-6-1992. The alleged offence had been committed admittedly during the said period. 39. Section 2(c) of the 1992 Act defines "securities" to mean :- '(c )"securities" includes- (i )shares, scrips, stocks, bonds, debentures, debenture stock, units of the Unit Trust of India or any other mutual fund or other marketable securities of a like nature in or of any incorporated company or other body corporate; (ii )Government securities; and ....
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....s of P.F.X. Saldanha & Sons [1991] 3 SCC 617). 44. In Commercial Taxation Officer v. Rajasthan Taxchem Ltd. [2007] 3 SCC 124, this Court stated: "22. We have already extracted the definition of raw material under section 2(34) which specifically includes fuel required for the purpose of manufacture as raw material. The word includes gives a wider meaning to the words or phrases in the statute. The word includes is usually used in the interpretation clause in order to enlarge the meaning of the words in the statute. When the word include is used in the words or phrases, it must be construed as comprehending not only such things as they signify according to their nature and impact but also those things which the interpretation clause declares they shall include." 45. This jurisdiction of the Special Court is not confined to the scam relating to securities alone but utilization of any amount relating to transactions in securities and for matters connected therewith or incidental thereto. 46. The jurisdiction of the Special Court is exclusive one. It exercises original jurisdiction to try offences relating to security scam. The said Act having regard to the peculiar nature ....
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.... the offence of Breach of trust, thus, related to the transaction in securities. 53. It is therefore not a case where it can be said that the Special Court lacked inherent jurisdiction, in trying the offence said to have been committed by the accused. RBI Circular 54. Banking business is controlled by several Acts of Parliament. We need not go into the history relating thereto in great details being not necessary. 55. Suffice it to say that UCO Bank is a Nationalized Bank having been taken over under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. It has various branches in Bombay; its main Branch being at D.N. Road. Its Nariman Point Branch was mainly dealing with foreign exchanges. The business as regards discounting and rediscounting usually used to be carried out at the main branch. 56. The Bank, inter alia, is regulated under the provisions of the Reserve Bank of India Act, 1934 as also the Banking Regulation Act, 1949 ('the 1949 Act'). Its directions are statutory in character. 57. In terms of section 35A of the 1949 Act, the Reserve Bank of India is empowered to issue directions to the Banks in public interest; or in the interest....
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....lves greater risk than the purchaser of bills drawn on unconnected, independent drawees. Purchase of house bills should be recommended for sanction only when the credit rating, business integrity, past dealings and business methods of the customer are highly satisfactory and he is considered good for the limit on his single signature." The effect of the circular letter 62. Accused Nos. 1, 2 and 8 being public servants, they were bound by the aforementioned Circulars having been issued by the Reserve Bank of India. 63. Mr. Jethmalani, however, has relied upon the decision in B.O.I. Finance Ltd. v. Custodian [1997] 12 SCL 99 (SC) wherein this Court while dealing with a Circular letter which had been marked confidential opined that such a Circular did not bind third parties, stating: "22. With regard to the finding of the Special Court that the transactions in question were illegal, as they were in contravention of the circulars which were issued by the Reserve Bank of India under the provision of the Act, it was contended by Mr. Cooper, learned Counsel, that the circulars issued were no more than guidelines which were required to be followed by the Bank and they were not ....
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....amcharan AIR 1977 MP 68 held : '"6. Although the Constitution does not contain any generic definition of law, it defines "law" for purposes of Article 13 to include "any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law". Article 366(10) of the Constitution also defines the expression "existing law" to mean "any law, Ordinance, Order, bye-law, rule or regulation passed or made before the commencement of this Constitution by any Legislature authority or person having power to make such law, Ordinance, order, bye-law, rule or regulation". Another definition which is relevant here is the definition of the expression "Indian law" in the General Clauses Act, 1897. Section 3(29) of this Act defines "Indian Law" to mean "any Act, Ordinance, regulation, rule, order or bye-law, which before the commencement of the Constitution had the force of law in any Province of India or part thereof and hereafter has the force of law in any Part A State or Part C State or part thereof, but does not include any Act of Parliament of the United Kingdom or any Order in Council, rule or other instrument made under such Act". These....
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....rust in the following terms: '"405. Criminal breach of trust - Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".' 73. An offence of criminal breach of trust by a public servant attracts the penal provision of section 409 of the Indian Penal Code. Indisputably, the Bank entrusted its funds to its officers; they had the dominion over the said property; they were holding the said money in trust which is an comprehensive expression, inter alia, to denote a relationship of master and servant. The act of Criminal Breach of Trust per se may involve a civil wrong but a breach of trust with an ingredient of mens rea would give rise to a criminal prosecution as well. The ingredients of section 409 are: 1.Accused must be a Public servant, merchant, ....
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....k was dishonestly used or disposed of in violation of any direction of law prescribing the mode therefor. The mode of disposal of the public money is prescribed in terms of the UCO Bank Manual and the Circulars issued by the Reserve Bank of India. It was, however, necessary for the prosecution to prove that the same was done with requisite mens rea. 78. Before proceeding further, we may notice some basic facts which have been proved by the prosecution and in respect whereof there is not much controversy. 79. All the accused were working as full-time employees. On 13-3-1992, Margabanthu (accused No. 1) Chairman-cum-Managing Director of the Bank met Harshad Mehta, the prime accused. This has been proved by Joglekar PW-6 the Driver and R.L. Joshi, PW-7. 80. What transpired in the said meeting although is not known, the purport thereof can be found out from the representation made by Accused No. 1 in the meeting held on 14-3-1992, which was attended by PW 44 - Prabhu, Assistant General Manager of the Nariman Point Branch, PW 45- Bhaskar Roy Choudhary, Dy. General Manager, Accused No. 8 - Ramanathan, Divisional Manager and PW 7 - R.L. Joshi, Market Promotion Officer, that the b....
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....informed about the transaction appears to be that he used to handle the call money. If a large chunk of money goes out of the coffer of the bank, it would have been probably necessary to arrange for call money in future. 85. Although, it is not the case of the prosecution that Nariman Point Branch of the Bank had not been dealing with discounting/rediscounting of the Bills of Exchange; what was pointed out was that from the said Branch such a huge transaction had never been carried out. Objection of PW-44 was overruled on the premise that Harshad Mehta who had vast experience in the field himself would be taking care of the transaction. 86. Indisputably, thus, the person for whose benefit the transactions were sought to be carried out, was involved in the internal functioning of the Bank. This aspect of the matter has been proved by PW-7 - R.L. Joshi, PW-44 - S.V. Prabhu and PW-45 - Bhaskar Roy Choudhary. 87. On the same day, Growmore passed a resolution to open an account at the Nariman Point Branch of the UCO Bank for the purpose of availing Bill Discounting limit of Rs. 50 crores. Harshad Mehta (accused No. 3), Ashwin Mehta (accused No. 4) and Sudhir Mehta (accused No. ....
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....avour of State Bank of Patiala for a sum of Rs. 25,36,64,000. They also brought two Bills of Exchange (Exhibit 154 and Exhibit 155) one of which was drawn by M/s J.H. Mehta for a sum of Rs. 14,41,44,000 signed by Ashwin Mehta (accused No. 4) and the other for a sum of Rs. 35,95,24,000 signed by Sunil Samtani (Accused No. 7). Whereas former (Exhibit 154) was accepted by Growmore and the later (Exhibit 155) by Mazda. Both the Bills of Exchange were executed by Sudhir Mehta (accused No. 5). 90. Ranjit Mukherjee (PW-1) who was supported by PW-44 - Prabhu categorically stated that no original contract note with regard to the underlying security transactions had been produced, only a photocopy was produced. No security was received for discounting the Bills of Exchange. Banks also did not have the shares in relation to which the Bills of Exchange were drawn before the promissory notes were executed. 91. As is customary, having regard to the nature of the promissory notes being usance, Mazda and Growmore were to repay the amount on 24-4-1992. They issued letters promising to do so (Exhibit 35 and Exhibit 36). 92. Letters were also issued asking the Bank to issue cheques in the na....
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....ough permits advances as against house bills but it stipulates that for the said purpose, creditworthiness of the customer was required to be verified. Credit limit was also to be fixed. For the said purpose, credit reports were to be compiled; limits were to be sanctioned. The jurisdiction of Chairman-cum-Managing Director and other Authorities are fixed if the Bills of Exchange exceeds Rs. 25,000, credit report on drawees on whom the bill is drawn is also required to be obtained. The Manual mandates that security be also taken. The duty had been cast on the Manager to satisfy himself that Bills of Exchange is the result of genuine trade transaction. Illegality 96. Section 43 defines the terms 'Illegal' or 'Legally bound to do' in the following terms : '43. "Illegal", "Legally bound to do" - The word "illegal" is applicable to everything which is an offence or which is prohibited by law, or which furnishes ground for a civil action; and a person is said to be "legally bound to do" whatever it is illegal in him to omit.' 97. It carries a very wide meaning. If any ground for civil action can be founded on the basis of any act of omission or commission on the part of a pe....
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..... Growmore and M/s. Mazda. As the amount paid under the Bills of Exchange by the Bank was returned to the Bank, it is beyond the purview of any explanation why the bills of exchange had been drawn in the first place. Obviously the discounting of the Bills of Exchange in our opinion did not represent a bona fide commercial transaction. 102. It has been brought to our notice by the learned counsel for the appellants that Harshad Mehta was behind all the entities. Apart from his individual capacity, he was acting on behalf of M/s. J.H. Mehta, Mazda and Growmore. This fact was not unknown to the officers of the Bank. Each one of the private accused was connected in one way or the other with each of the said entities. Sudhir Shantilal Mehta (accused No. 5) held the Power of Attorney and was the authorized signatory of M/s. J.H. Mehta. In a situation of this nature, in terms of the Manual if house bills were to be purchased where the drawer and the drawee were closely interconnected, the following requirements were to be satisfied, namely, (i) if the credit rating is high, (ii) business integrity and (iii) past dealings and the business methods of the customer were highly satisfactory....
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....of the Manual it was necessary that prior sanction should be obtained. At least, none has been produced before us. 106. Strong reliance has been placed on a resolution of the Board of Directors dated 12-5-1992 whereby all support was extended to accused No. 1. The same, in our opinion, is of no significance as even on that day the Board of Directors did not ratify the transaction. 107. We may notice that the Officers of the Bank were aware of the fact that the Bank finances were not utilized for speculative purposes. The Banking business is governed by sound practice. Any advance exceeding Rs. 5 lakhs against shares and debentures was to be sanctioned by the Board/Committee of Directors. As it is stated :- "12. Advances exceeding Rs. 5 lakhs against shares and debentures should be sanctioned by the Board/Committee of Directors. Suitable powers may be delegated to the Chief Executive and others for sanctioning advances for lesser amounts." 108. Advances against securities/shares/debentures in terms of explanatory note included all types of advances. The Executive Director of UCO Bank Biswajit Choudhari (PW-37) accepted that the discounting of bills is a method of advanci....
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....at the transaction had been carried out for the purpose of disposing of the property belonging to the Bank or having used dishonestly and/or in violation of the direction of law, the prosecution must succeed. The entire transaction was undertaken with one motive that the funds of UCO Bank should be made available to Harshad Mehta who was the stock broker. 111. Evidently, UCO Bank was approached as a conduit as it had no money of its own. Whereas other banks were secured as they had issued cheques in the name of Nationalized Bank; UCO Bank did not obtain any security or pledge. The fact that it had undertaken a grave risk is not in dispute. Money was to be returned by a fixed date, namely, 24-4-1992. 112. Even the balance sheet and annual reports of the two banks were not sought for far less scrutinized for arriving at a satisfaction as regards the capability of the borrower to repay the amount within the stipulated time. Only after advances were made i.e., on 26-3-1992, PW-44 asked PW-1 to collect the balance sheet from Mazda and Growmore for forwarding them to the Head Office for seeking approval of the Bill Discounting already done. PW-1 in his evidence stated :- "Rou....
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...."Shri Harshad Mehta told us that he and Mr. Margabanthu had already decided that the period of discounting will be extended by one month." 114. From the aforementioned evidence, it is evident that PW-44 informed about his decision for insistence of payment to accused No. 2 and PW-45 also informed of the same to accused No. 1. We can understand that accused No. 2 being a high-ranking Officer was informed particularly in view of the fact that if the Bank does not get back the money, it has to take loan for the purposes of having call money, but the very fact that the high-ranking officers also informed the accused No. 8, speaks a volume. We would consider this aspect of the matter a little later. 115. Admittedly, even on 24-4-1992 payments were not made either by the drawer or by the acceptors. At this stage, it may not be necessary to consider the submission of Mr. Bhattacharyya that in terms of section 32 of the Negotiable Instruments Act, it was the acceptor's liability and not the drawer's liability, for the simple reason that whosoever's liability it was, the fact remained that the money had not been re-deposited. Indisputably, UCO Bank had to make payment out of its own f....
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....rned Special Judge as regards the accused No. 8. Criminal Conspiracy 118. Criminal conspiracy is an independent offence. It is punishable independent of other offences; its ingredients being :- (i)an agreement between two or more persons. (ii)the agreement must relate to doing or causing to be done either (a) an illegal act; (b) an act which is not illegal in itself but is done by illegal means. 119. It is now, however, well-settled that a conspiracy ordinarily is hatched in secrecy. The court for the purpose of arriving at a finding as to whether the said offence has been committed or not may take into consideration the circumstantial evidence. While however doing so, it must bear in mind that meeting of the minds is essential; mere knowledge or discussion would not be. 120. As the question has been dealt with in some detail in Criminal Appeal No. 76 of 2004 (R. Venkatakrishnan v. Central Bureau of Investigation) it is not necessary for us to dilate thereupon any further. 121. We may, however, notice that recently in Yogesh @ Sachin Jagdish Joshi v. State of Maharashtra AIR 2008 SC 2991, a Division Bench of this Court held :- "23. Thus, it is manifest that ....
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....s. The agreement amongst the conspirators can be inferred by necessary implications. In most of the cases, the conspiracies are proved by the circumstantial evidence, as the conspiracy is seldom an open affair. The existence of conspiracy and its objects are usually deducted from the circumstances of the case and the conduct of the accused involved in the conspiracy. While appreciating the evidence of the conspiracy, it is incumbent on the Court to keep in mind the well-known rule governing circumstantial evidence viz., each and every incriminating circumstance must be clearly established by reliable evidence and the circumstances proved must form a chain of events from which the only irresistible conclusion about the guilt of the accused can be safely drawn, and no other hypothesis against the guilt is possible. The criminal conspiracy is an independent offence in Indian Penal Code. The unlawful agreement is sine qua non for constituting offence under Indian Penal Code and not an accomplishment. Conspiracy consists of the scheme or adjustment between two or more persons which may be express or implied or partly express and partly implied. Mere knowledge, even discussion, of the Pl....
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....disclose that for the aforementioned purpose he had met Harshad Mehta earlier. Accused No. 8 was present in the said meeting. He, however, is said to have not taken any part therein. During the said meeting itself, accused No. 1 spoke to accused No. 2. Possibility of having transactions relating to bill discounting was disclosed. Accused No. 2 was consulted. Accused No. 2 did not deny or dispute receipt of the telephonic call but merely took a plea that according to him details thereof had not been furnished to him. As a follow up of the decision taken in the meeting held by accused No. 1, resolutions were passed by Mazda and Growmore. However, a note in relation to the aforementioned meeting was prepared which related to the aforementioned discussions. Why Nariman Point Branch was chosen for carrying out the said transaction is not known. P.W.-44 raised objection stating that only the D.N. Road Branch used to deal with the matter relating to bill discounting. It is now no longer in dispute that Mazda had approached D.N. Road Branch for getting the facility of discounting up to 50 crores of rupees but the same was not granted as it did not satisfy the eligibility requirements. The ....
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....or investment in shares is up to Rs. 10 crores. His power in regard to bill discounting is only up to Rs. 5 crores. So far as other accused are concerned, namely accused No. 3, accused No. 4 and accused No. 5, they were not only residing at the same place but accused No. 4 and accused No. 5 were men of trust of Harshad Mehta. A power of attorney had been executed in their favour. 131. The Board of Directors of Growmore had by their resolution dated 14-3-1992 authorized accused Nos. 4 and 5 to seek bill discounting facility from UCO Bank to the limit of Rs. 50 crores. The application for opening the account of Growmore at Nariman Point had been signed by accused No. 4. Further on behalf of Growmore the Bills of Exchange had been accepted by accused No. 4. Not only this but the letter dated 24-3-1992 addressed to UCO Bank by Growmore undertaking to repay the amount by 24-4-1992 had also been signed by accused No. 4. Legally the Bank would have been concerned only with M/s. J.H. Mehta. But the letter of Growmore signed by accused No. 4 clearly indicates his involvement in the Criminal conspiracy. 132. So far as accused No. 5 is concerned, it is he who had signed the Bill of Exch....