TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1248
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....wn, is one of the main Accused in this case, against whom the case however stands abated on account of his untimely death in the year 2001. The other Accused were at the relevant time the Officers in the State Bank of India, Main Branch, Mumbai (for short, "SBI Main Branch") and its subsidiary, State Bank of India Capital Markets Ltd. (for short, "SBI Caps"), except Accused No. 8 Ashwin Mehta, who was Broker and the Constituted Attorney of Accused No. 2 Harshad Mehta and Accused No. 3 C. Ravi Kumar and Accused No. 12 Suresh Babu, who were the Officers of National Housing Bank (for short, "NHB"). Prosecution Case - As set out in the 'Charge-Sheet' :- 2. According to the Prosecution, these Accused-persons had conspired together for the benefit of Accused No. 2 Harshad Mehta. Hence, all of them are prosecuted and are tried under the umbrella charge of criminal conspiracy, punishable under Section 120-B of The Indian Penal Code (for short, "IPC"), along with the charge for the offence punishable under Section 420 of IPC, in the alternate Section 409 of IPC. 3. Accused Nos.1, 3, 4, 5, 15, 16 and 17, who are alleged to be the public servants, are also tried for the offence punishable....
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.... behalf of SBI Capital Markets, in consequence of which the Crime was registered. The case was initially registered against Accused No. 1-R. Sitaraman, Accused No. 2-Harshad S. Mehta (since deceased) and Accused No. 3-Coodli Ravi Kumar only, for the offences punishable under Section 120B of IPC, r/w. Sections 420, 467, 471 and 477A of IPC and Section 13(1) (c) and (d) r/w. Section 13(2) of the Prevention of Corruption Act, 1988. 13. The investigation of the crime was conducted by PW-34 Deokumar Choudhary, Deputy Superintendent of Police in the Bank Securities and Fraud Division of CBI. He was assisted by PW-36 Partha Mukherjee, attached to the Bank Securities Cell, CBI, New Delhi. During the course of investigation, they verified the Bank Records and collected the relevant documents from different agencies, like, State Bank of India, other Banks and Private Parties. More than 1000 documents were collected. The statements of about 154 witnesses were recorded. Some of the Accused persons were arrested. The search was conducted at the residence of Accused No. 4 Ashok Agarwal. Some documents were also referred to the Handwriting Expert for his opinion. In due course, the sanction for ....
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....se, J.) on 13/02/2015, 11/06/2015 and 17/08/2015 respectively. 19. Accused No. 7 Hiten B. Mehta, Accused No. 9 Sudhir S. Mehta, Accused No. 10 Pankaj V. Shah and Accused No. 11 Atul M. Parekh came to be discharged by the separate orders passed by this Court on 23/02/2017 20. Thus, as on today, the case stands against Accused No. 1 R. Sitaraman, Accused No. 3 Coodli Ravi Kumar, Accused No. 4 Ashok Agarwal, Accused No. 5 Janardan Bandopadhyay, Accused No. 8 Ashwin S. Mehta, Accused No. 12 Seetapathy Suresh Babu, Accused No. 15 Shyamsunder R. Gupta, Accused No. 16 Bhushan D. Raut and Accused No. 17 P. Murlidharan only. 21. The 'Charge' is framed against these remaining nine accused as per Exhibit-02 on 28/04/2017. The 'Charge' contains totally 158 heads. It was read over and explained to them. All the accused pleaded not guilty and claimed trial, raising the defence of denial and false implication. 22. In support of its case, the Prosecution has examined in all 38 witnesses. Majority of them are the Officers from SBI Main Branch and SBI Caps. Remaining witnesses are the Sanctioning Authorities, the Brokers and the Investigating Officers. These witnesses can be categorized as follo....
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....ry [Exhibit-520] * PW-36 Dy.S.P. Partha Mukherjee [Exhibit-530] 23. After the Prosecution has closed its case, the statements of Accused-persons were recorded u/s. 313 of Cr.P.C. In their statements, Accused have denied all the incriminating evidence brought on record by the Prosecution against them and to substantiate their defence of false implication, relied upon their own documentary evidence, which will be considered and referred to as and when required. 24. In support of his defence, Accused No. 1 has examined the broker, by name, M.Z. Rehman (Exhibit-D-5). 25. Whereas, Accused No. 3 Coodli Ravi Kumar has examined one witness, by name, Gopal Shankar Iyer (Exhibit-D-4), who is a Chartered Accountant and has worked with Fairgrowth Financial Services Ltd. in its office at Mumbai. 26. Accused No. 8 Ashwin Mehta has examined himself as DW-2 (Exhibit-D-3) and also one witness, by name, Vishvesh P. Bhatt (Exhibit-D-1), who was working as 'Computer Operator' in the firm of M/s.Harshad S. Mehta. 27. At the end of this marathon trial, which was initiated with filing of 'Charge-Sheet' on 12th October, 1993, commenced with framing of 'Charge' on 28th April, 2017, proceeded with re....
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....2 Harshad Mehta or Accused No. 8 Ashwin Mehta, the pecuniary gains and advantages and thereby committed the offence under Section 13(1) (d) read with 13(2) of the Prevention of Corruption Act? Negative. 5 Whether the Prosecution proves that Accused No. 1 R. Sitaraman and Accused No. 16 B.D. Raut have committed the offence of falsification of the accounts of SBI with dishonest and fraudulent intention and thereby committed the offence under Section 477A read with 120B of IPC? Negative. 6 Whether the Prosecution proves that Accused No. 3 Ravi Kumar and 12 Suresh Babu have in prosecution of the common object of criminal conspiracy committed the offence of forgery of the Bank Receipt and used the said BR as genuine, knowing fully well that it was a forged document and thereby committed the offence under Sections 467 and 471 read with 120B of IPC? Negative. 7 Whether the Prosecution proves that in prosecution of the common object of criminal conspiracy Accused No. 8 Ashwin Mehta and Accused No. 15 S.R. Gupta dishonestly received the stolen property and assisted in concealment of stolen property, knowing it to be so and thereby committed the offence under Section 411 and 414 rea....
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....e cheques for these transactions, by debiting or crediting the account of the broker or the counter party and further to collect the Banker's Receipt (BR) or Physical Securities. At the end of the day, they were to send the statement of accounts of the transactions entered into on that day and that statement of account was required to be tallied with the account of SBI Caps. In all these transactions in this case Accused No. 2 Harshad Mehta was the broker of SBI Caps. 32. As per the Prosecution, all these twenty four transactions entered into by SBI Caps were the transactions of purchase of securities, for which the deals were struck by either Accused No. 4 Ashok Agarwal, Accused No. 5 Janardan Bandopadhyay or Accused No. 15 S.R. Gupta. The debit authorization letters were prepared, after entering these deals in the Blue Diary by Accused No. 17 P. Murlidharan and on the basis of those authorization letters, Accused No. 1 was expected to make payments to the counter parties and to collect either the BRs or Physical Securities. The contention of the Prosecution is that, in this case, none of such BRs or the physical securities were received from the counter parties or from the broke....
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....315 and in the Statement of Account Exhibit-320 of SBI, however, there is mention of this transaction. According to the Prosecution case, thus, Accused No. 4 Ashok Agarwal is liable for this transaction, as he has issued the Debit Authorization Letter without there being Deal Ticket and without making entry of this transaction in the Blue Diary Accused No. 8 Ashwin Mehta is involved therein as he has signed the Contract Note; whereas Accused No. 1 R. Sitaraman is liable for this transaction, as he has issued the Debit Voucher for this transaction by mixing the amount of this transaction with other amount and diverted the said funds to the account of Accused No. 2 Harshad Mehta. He has also cancelled the name of 'Vijaya' and substituted it with 'Canara' in Purchase Slip Book. On factual aspects, however, it has to be stated that, admittedly there is no Deal Ticket of this transaction. The Prosecution has also failed to prove the debit authorization letter, alleged to be signed by Accused No. 4 Ashok Agarwal. What is produced is its photocopy. Hence, it is marked as Article-N. Factually, as pointed out by learned counsel for the Accused, it is also not correct that the name 'Vijaya....
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....out diversion of amount to CANFINA. Accused No. 2 Harshad Mehta has issued the Contract Note for this transaction; whereas the Delivery Order was issued by Accused No. 11 Atul Parekh, since discharged. It is further case of the Prosecution that to cover up this fraudulent diversion of amount of Rs. 67,83,00,000=00, Accused No. 12 Suresh Babu, Assistant Manager of NHB prepared a false BR Exhibit-274 for 5 crore Units for the amount of Rs. 67,95,00,000=00 in favour of SBI. It was signed by Accused No. 3 C. Ravi Kumar, though they were fully aware that no such transaction was executed with NHB. According to the Prosecution, Accused No. 1 R. Sitaraman dishonestly and fraudulently retained the said forged BR to cover up fraudulent diversion of the amount of Rs. 67,83,00,000=00 to the account of Accused No. 2 Harshad Mehta. It is also the case of the Prosecution that Accused No. 1 R. Sitaraman did not make any entry of this BR in the BR Register and falsely shown this transaction as the ready-forward transaction between SBI Caps and CANFINA for purchase of 5 crore Units of UTI to be reversed on 17/09/1991 by CANFINA. Thus, according to the Prosecution, in this transaction Accused No.4 ....
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.... the Prosecution has not produced Certifed Copy of the Statement of the Account of Accused No.2 Harshad Mehta. What is produced is photocopy, which is marked as Article-F. Hence, no evidence to prove, that amount was credited to the account of Accused No.2 Harshad Mehta. The Debit Voucher is also for consolidated amount. 4) Transaction No.4 dated 06/04/1992 This transaction is pertaining to the purchase of 1 crore Units for Rs. 15,15,00,000=00 on ready-forward basis. The transaction was to be reversed on 21/05/1992. In this transaction also the CANFINA was shown to be the counter party. This transaction was finalized by Accused No.5 Bandopadhyay. The Deal Ticket (Exhibit-20) was prepared and signed by him. He also issued Debit Authorization Letter Exhibit-21 for the said amount without obtaining the BR or physical securities for the same from CANFINA. The Contract Note for the same was prepared by Accused No.10 Pankaj Shah and signed by Accused No.9 Sudhir Mehta, both of whom are discharged. Accused No.1 R. Sitaraman has, on the basis of the Debit Authorization Letter, debited the account of SBI by issuing Debit Voucher Exhibit-489, but instead of making the payment to CANFINA, c....
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.... produced or proved on record. Moreover, there is no document produced on record to show that in the Debit Voucher (Exhibit-468) this amount of Rs. 4,20,00,000=00 is included. 6) Transaction No.6 dated 07/06/1991 It is in respect of the purchase of 9% IRFC Bonds of the face value of Rs. 15 crore. The transaction was on ready-forward basis and it was to be reversed on 13/06/1991. The name of the counter party was shown as UCO Bank. The total amount, on reversal was stated to be Rs. 15,24,78,082=19. Accused No.15 S.R. Gupta has acted as a Dealer in this transaction. He has finalized this deal vide Deal Ticket Exhibit-356. The Debit Authorization Letter is issued vide Exhibit-466 and the Dealing Operation Report Exhibit-357 Accused No.15 S.R. Gupta did not obtain the Contract Note for this transaction from Accused No.2 Harshad Mehta. Accused No.1 R. Sitaraman prepared the Debit Voucher vide Exhibit-216 for the amount of Rs. 32,62,79,811=33 which included the amount of Rs. 15,24,78,082=19. He has also prepared the Credit Banker Cheque Voucher Exhibit-265 for the amount of Rs. 12,19,57,070=75 and then issued the Banker's Cheque for the said amount (Exhibit-217). Another Credit Voucher....
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....ys Bank were also credited to the account of Accused No.2 Harshad Mehta in the said Bank. According to the Prosecution, there were no written instructions for crediting these two Cheques to the account of Accused No.2 Harshad Mehta, but despite that, the funds were diverted to his account. In this case therefore the Prosecution has implicated Accused No.15 S.R. Gupta, who has finalized the deal and prepared the Deal Ticket, issued Debit Instruction Note and Accused No.1 R. Sitaraman, who has issued the Banker's Cheques in favour of the UCO Bank and ANZ Grindlays Bank for diverting funds to the account of Accused No.2 Harshad Mehta, knowing fully well that no such transaction had taken place with UCO Bank. 8) Transaction No.8 dated 26/07/1991 This transaction is in respect of purchase of 9% IRFC Bonds for Rs. 125 crore. It was a ready-forward transaction to be reversed on 26/08/1991. The counter party was shown as UCO Bank. The Broker was Harshad Mehta and the total transaction was for the amount of Rs. 15,27,90,410=96. This transaction was finalized by Accused No.4 Ashok Agarwal. He has issued the Deal Ticket Exhibit-25 and the Dealing Operation Report Exhibit-26. He has done so....
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....ad Mehta in ANZ Grindlays Bank. Accused No. 17 Murlidharan has fraudulently mentioned in the BR Received Register (Exhibit-421) of SBI Caps Exhibit-423 that the BR for this transaction was received on 13/12/1991 and discharged on 30/12/1991, though there was no such transaction. PW-27 Vernekar has flatly denied having issued any BR in favour of SBI Caps or having received any payment of Rs. 6,70,00,000=00 from SBI Caps. According to the Prosecution, Accused No. 17 Murlidharan has therefore falsified the account and record of SBI Caps. Hence, in this transaction the Prosecution has implicated Accused No.1 R. Sitaraman, Accused No.5 Bandopadhyay and Accused No. 17 Murlidharan. 10) Transaction No.10 dated 20/12/1991 This transaction is in respect of purchase of UTI Units for Rs. 15,00,00,000=00. It was Accused No.4 Ashok Agarwal who has finalized the deal for purchase of these Units and issued the Deal Ticket Exhibit-29 for the amount of Rs. 20,25,00,000=00 and further Deal Ticket (Not Exhibited) for the amount of Rs. 11,47,50,000=00. Both the Deals were totaling for the amount of Rs. 31,72,50,000=00. The Debit Authorization Letter (Exhibit-31) was accordingly issued by him and on ....
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....e issued by Accused No.4 Ashok Agarwal vide Exhibit-35 to 39. The Debit Authorization Letters are also issued by him and they are marked as Exhibit-585 to 589. He has however not obtained any securities or BR from the UCO Bank, as infact there was no such transaction. On the basis of the Debit Authorization Letters issued by him, Accused No.1 R. Sitaraman has debited the account of SBI Caps with SBI for the total sum of Rs. 60,97,50,000=00 by preparing a single Debit Voucher (Exhibit-149) for Rs. 57,58,75,000=00 and another single Debit Voucher (Exhibit-150) for the amount of Rs. 3,38,75,000=00. The amount was again diverted to the account of Accused No.2 Harshad Mehta. Accused No.17 Murlidharan has falsely mentioned in the BR register that the BR was received, although there was no such transaction. According to the Prosecution, therefore, Accused No.1 R. Sitaraman, Accused No.4 Ashok Agarwal and Accused No.17 are involved in this transaction. 13) Transaction No. 13 dated 01/01/1992 This transaction is for purchase of Units of 8.50 crore for the total amount of Rs. 11,56,00,000=00 and 30 crore Units of Rs. 40,89,50,000=00. The total value of the two deals is Rs. 52,45,00,000=00....
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....instead of making the payment to CANFINA, credited the said amount in the account of Accused No.2 Harshad Mehta in SBI by issuing various Cheques in favour of ANZ Grindlays Bank. 16) Transaction No. 16 dated 14/01/1992 This transaction is for the purchase of the Units for the amount of Rs. 6,77,50,000=00. The Deal Ticket Exhibit-51 for the same was prepared and signed by Accused No.5 Bandopadhyay Debit Authorization Letter is at Exhibit-593. On the basis thereof, the amount was diverted to the account of Accused No.2 Harshad Mehta by Accused No.1 R. Sitaraman issuing several Banker's Cheques Exhibit-93 and 97 of different amounts favouring ANZ Grindlays Bank and Bank of India respectively. 17) Transaction No. 17 dated 15/01/1992 It is a purchase transaction by SBI Caps. The counter party is shown as CANFINA. The Deal Ticket Exhibit-358 is prepared by Accused No.5 Bandopadhyay. On the basis of the same, Accused No.1 R. Sitaraman has issued the Banker's Cheque Exhibit-113 of Rs. 15,60,75,000=00 favouring the ANZ Grindlays Bank for crediting amount to the account of Accused No.2 Harshad Mehta. Hence, as per the Prosecution case, both Accused No.1 R. Sitaraman and Accused No.5 Band....
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....Accused No.5 Bandopadhyay. It pertains to purchase of 3 crore UTI Units of Rs. 21,00,00,000=00. Accused No.1 R. Sitaraman has issued the Debit Voucher (Exhibit-506) for the amount of Rs. 66,89,94,171=23 inclusive of this amount of Rs. 21,00,00,000=00. The said amount was debited from the account of SBI Caps, but credited to the account of Accused No.2 Harshad Mehta by various Cheques Exhibit-500, 502 and 507 issued for different amounts. Accused No. 17 Murlidharan has made the entry about receipt of BR, though there was actually no such BR received, as there was no such transaction. 21) Transaction No.21 dated 30/01/1992 It was a purchase transaction and the counter party was shown as Syndicate Bank. Accused No.5 Bandopadhyay has issued the Deal Ticket Exhibit-62 and Debit Authorization Letter Exhibit-594 for this transaction for the amount of Rs. 30,93,75,000=00. Accused No.1 R. Sitaraman has debited this amount from the account of SBI Caps vide Debit Voucher (Exhibit-506) and issued the Banker's Cheque (Not Exhibited) for Rs. 40,96,39,000=00 inclusive of Rs. 30,93,75,000=00, but instead of making the payment to Syndicate Bank, credited the amount of Rs. 40,96,39,000=00 inclusiv....
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....BI Caps, where the securities related transactions used to be undertaken. Accused No.4 Ashok Agarwal, Accused No.5 Janardan Bandopadhyay and Accused No.15 S.R. Gupta were working as Dealers in the said Department; Whereas PW-23 Smt.Nalini Prabhu was working there as Manager of the Back Office. The said Department was headed by Mr. S.V. Naik. In the Back Office, Accused No. 17 P. Murlidharan was working along with one Mr. Srikant and PW-38 Deepak Sogani. 36. According to evidence of these four witnesses, in case of purchase of securities one of the Dealer, out of the three Dealers, namely, Accused No.4 Ashok Agarwal, Accused No.5 Janardan Bandopadhyay and Accused No.15 S.R. Gupta, used to negotiate with the counter party on telephone and discuss the details of the deal. After the deal was finalized, the Deal Ticket was prepared by the said Dealer. Thereafter, the Deal Ticket was sent to the Back Office, where it was entered into the Blue Diary. The debit Instructions Letter accordingly was issued to the State Bank of India, Main Branch. In State Bank of India, Main Branch, Accused No.1 R. Sitaraman, who was looking after these securities transactions used to issue the cheques along....
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....the Deal Slip from the Dealers in the Front Office, has stated that he was entering the details of the Deal Slip in the Register and he used to visit the State Bank of India, Main Branch every day, as it was handling the funds for SBI Caps. There he used to meet Accused No.1 R. Sitaraman and deliver him the Fund Transfer or Debit Authorization Instructions given to him by his seniors. 41. The evidence of PW-38 Deepak Sogani, who was also working in the Back Office of SBI Caps depicts that the debit or credit instruction letters used to be prepared as per the instructions received in the Back Office from the Dealers working in the Front Office. These letters were required to be signed by two authorized signatories of the Bank, including one Officer from the Treasury Division and the other Officer from outside of the Treasury Division. He used to maintain the Cash Register, which was called as Blue Book/Blue Diary. Accused No. 17 P. Murlidharan was mostly making the entries in the Blue Diary. However, if he was not available, this witness Deepak Sogani used to make those entries in the Blue Diary on the basis of the Deal Ticket. He has also confirmed that Deal Ticket would mention t....
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....ed No.1 used to give them instructions in whose name these cheques or Vouchers were to be prepared by them. Both of them have deposed that all the documents relating to the Bank used to be in possession of Accused No.1 R. Sitaraman alone and he was the whole and sole authority in entire security transactions. They had to follow his instructions and were not in a position to oppose or question his instructions. 46. PW-15 Ashok Virkar has also sometimes worked in the Securities Division of SBI, Main Branch in the absence of Accused No.1 R. Sitaraman. According to him also, during those times, on the basis of the instructions received from SBI Caps, he was issuing the Credit Vouchers and two Credit Vouchers were issued by him when Accused No.1 R. Sitaraman was on leave. His evidence is mainly on the point that it was the job of Accused No.1 R. Sitaraman to issue the Credit Vouchers on the basis of the instructions received from SBI Caps. 47. The material evidence in this case is that of PW-28 Ulhas Wakade, who was posted in Securities Division on 02/04/1992. As Accused No.1 R. Sitaraman was proceeding on leave, he was directed to familiarize himself with the work Accused No.1 R. Sit....
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....used No.1 R. Sitaraman. In his evidence before the Court this witness has identified the various slips which were prepared and issued by him as per the instructions of Accused No.1 R. Sitaraman. Through his evidence, the Prosecution has also proved the Debit Vouchers and Banker's Cheques, issued according to instructions of Accused No.1 R. Sitaraman. 50. The evidence of PW-21 Arun Advalkar who was also working in the Securities Division, especially in the Waste Book Section goes to prove that he was making entries in the Waste Book on the basis of the Vouchers received from various Divisions. The Vouchers were in the form of Banker's Cheques and Debit and Credit Vouchers. When SBI was issuing the Cheques, there used to be the Credit Vouchers and when SBI was receiving the Cheques from others, the Debit Vouchers was prepared. According to his evidence, these Vouchers were received from the Securities Division and he has identified some of those Vouchers. 51. The evidence of PW-22 Girish Patel is also of a similar nature. He was maintaining the Waste Book like PW-21 Arun Advalkar and through his evidence also, the Prosecution has tried to prove some of the Vouchers and the entries ....
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....ntered into by the CANFINA and the name of CANFINA was wrongly and fraudulently shown therein. 55. To prove that these cheques issued by Accused No.1 R. Sitaraman in favour of Accused No.2 Harshad Mehta were encashed in the account of Accused No.2 Harshad Mehta, the Prosecution has relied upon the evidence of PW-10 Smt. Jeroo Dalal, who was working in ANZ Grindlays Bank at Mumbai and who has deposed about the receipt of the various Cheques which were credited to the Account of J.H. Mehta maintained in their Bank. 56. The Prosecution has then also relied upon the evidence of PW-12 T.R. Gopalkrishnan, who was also working in ANZ Grindlays Bank at M..G. Road, Mumbai. Accused No.2 Harshad Mehta was having his account in their Bank and he has deposed about the deposit slips and the current Account Statement of not only the account of Accused No.2 Harshad Mehta but that of J.H. Mehta, Ashwin Mehta and other family members of Harshad Mehta, who were also having the accounts in the said Bank. 57. Lastly the Prosecution has placed reliance on the evidence of PW-24 Satyanarayan Subramaniam, who was working in State Bank of Mysore at Dalal Street Branch in Mumbai. According to his evidence....
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....ere were some of the BRs which counter parties were not confirming. 60. It is his categorical evidence that, during those days SBI was also acting as custodian of SBI Caps and it was holding the BRs which were collected on behalf of the SBI Caps. He took possession of these BRs from SBI in the month of June 1992. He had personally gone to SBI Main Branch for verifying actual transactions and in this process of accounting and reconciliation, he found that there were many transactions, which were put through in the account of SBI Caps, but were not actually executed, according to the instructions of SBI Caps. There were also the transactions which were made by direct credit to the broker's account. 61. According to his evidence, he found that nearly about 100 crores of rupees were due to be received by SBI Caps from SBI on account of BRs which were not honored by the counter parties. Accordingly he had submitted the 'Memorandum' to the CBI and lodged a claim against SBI. According to him, SBI had agreed to honor and make the payments, but still SBI Caps felt that the transactions were not properly executed and therefore, a complaint was lodged with CBI. 62. He has proved on record....
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....y can be undoubtedly proved by such evidence direct or circumstantial. But the court must enquire whether the two persons are independently pursuing the same end or they have come together to the pursuit of the unlawful object. The former does not render them conspirators, but the latter does. It is, however, essential that the offence of conspiracy require some kind of physical manifestation of agreement. The express agreement, however, need not be proved. Nor actual meeting of the two persons is necessary. Nor it is necessary to prove the actual words of communication. The evidence as to transmission of thoughts sharing the unlawful design may be sufficient. Conspiracy can be proved by circumstances and other materials." (See: State of Bihar v. Paramhans, (1986) Pat LJR 688.) 64. According to learned Special P.P., in a case where agreement is for an act which, by itself constitutes an offence, in that event, no overt act is necessary to be proved by the Prosecution, because in such a situation, the criminal conspiracy is established by proving such an agreement. It is urged that, it is also not necessary, when the charge is of criminal conspiracy, that each conspirator must know....
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....of Accused No.2 Harshad Mehta and therefore, all of them are liable for the umbrella charge of criminal conspiracy. 67. As against it, by placing reliance on this very judgment of Ram Narain Poply's case (supra), learned counsel for Accused No. 15 Mr. Satyanarayanan has submitted that though the charge of criminal conspiracy may be difficult to be proved, it being an offence committed in secrecy, there has to be some evidence at least to prove the essential ingredients, like the meeting of minds of the accused persons and their acting in-connivance with each other. Here in the case, it is submitted that the accused persons, from SBI Caps viz. the Dealers and Accused No.1 R. Sitaraman and Accused No. 16 B.D. Raut from SBI Main Branch, were acting totally independently and had no connection with each other. Moreover, the Prosecution has not led any evidence to prove that they had knowledge of each other acting in a particular way. Conversely, the evidence on record proves that the Officers from SBI Caps were carrying out one part of transaction, namely, the finalization of the deal; whereas its execution was done at the end of Accused No.1 R. Sitaraman in SBI Main Branch. Hence, if ....
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....ket issued by Accused No.4 Ashok Agarwal, Accused No.5 Bandopadhyay and Accused No.15 S.R. Gupta, the Debit Authorization Letters would not have been issued. So the very foundation of the offence was the issuance of the Deal Tickets mentioning the name of the counter party as CANFINA or UCO Bank, knowing fully well that CANFINA or UCO Bank was not the counter party. It is urged that, the starting point of the offence is the act of the Dealers, which has given rise to this entire scam. Merely, because the Debit Authorization Letters are signed by some other Officers, it does not mean that these Accused can no more be responsible for the subsequent diversion of funds. 70. Learned Special P.P. has in this respect placed reliance on the judgment of the Hon'ble Supreme Court in the case of State of Maharashtra v. Somnath Thapa [1996] 4 SCC 659, to submit that, when the charge is of criminal conspiracy and when the ultimate offence consists of a chain of circumstances and acts, it would not be necessary for the Prosecution to establish to bring home the charge of conspiracy that each of the conspirators had the knowledge of what the collaborator would do, so long as it is known that col....
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....osecution has spoken about the contents of the document; conversely they have admitted that they are not aware of the transactions, which are reflected in those documents. The Prosecution has therefore, only proved the signatures or at times only the handwriting on the said documents but not the contents thereof. It is urged that in some cases, the Prosecution has not even been able to produce the original documents. Hence, the Prosecution case cannot be said to be proved at all. 74. Learned counsel for Accused No.3 Mr. Sabnis has also placed reliance on the judgment of Hon'ble Supreme Court in the case of Sait Tarajee Khimchand v. Yelamarti Satyuam [1972] 4 SCC 562, to submit that, mere "exhibiting" of a document does not amount to "proving" of the document. Reliance is also placed on the judgment of the Hon'ble Supreme Court in the case of Maharao Shri Madansinhji v. State of Gujrat AIR 1969 GUJ 270, to submit that, for proving the contents of the documents, the person who has knowledge of the contents must give evidence about it. Here in the case, it is urged that the Prosecution has not examined the executants of the documents or the persons who had knowledge of the contents o....
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....t after delivery of the Deal Slip to the SBI Main Branch, the person from the Back Office used to bring from the SBI Main Branch the statement of account and the Contract Notes given by the Brokers. PW-33 Anil Joshi, who is from SBI has also deposed that the Contract Notes from Brokers were received by the Officer in-charge of the securities Division of SBI. The Seizure Panchanama Exhibit-449 also goes to show that the Contract Notes were seized from the SBI Main Branch. PW-1 Ashish Sable has also admitted that the Contract Notes were received by the Treasury Department of SBI by the person from the Back Office and those Contract Notes were simply filed in the Back Office. There was no system of entering the details thereof in any register or on the back portion of the Deal Ticket. 79. Therefore, the evidence on record, in this case, does not go to show that it was the responsibility of the Dealers, to obtain the Contract Notes or to receive the same or to file them properly. They were also not concerned with the follow up, if the Contract Notes were not received. Therefore, they cannot be fastened with the penal liability, on the count that they have completed the transactions, w....
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....party in the Deal Ticket on the basis of the information given by the Broker. There was no such system of cross checks. 82. Thus, once it is an accepted position on record that the Dealers had no concern with issuance of the Debit Authorization Letters or even collection of the Contract Note or the BR and physical securities, then the question does not arise of holding them liable, if the deal has not been processed, as per details given in the Deal Ticket. The job of the processing was with Back Office initially and thereafter, with the SBI Main Branch. It was entirely the responsibility of the Officers at the SBI Main Branch, to ensure that the amount was disbursed in accordance with the Debit Authorization Letters. It is categorically deposed by PW-23 Nalini Prabhu that SBI had to act on the basis of the Debit Instruction Letter issued by SBI Caps and SBI could not change the name of the counter party or even the amount mentioned in the Debit Authorization Letter. If despite that, SBI Main Branch had issued the Cheques for these deals in favour of either Accused No.2 Harshad Mehta or in favour of Bank(s) where Accused No.2 was holding the account, the Dealers in the case cannot....
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.... received from the Broker, they had written the name of counter party in the Deal Ticket and when there was no way of confirmation of these instructions received from the Broker, merely because these transactions ultimately could not take effect, the Dealers cannot be held liable for the same, at-least for the penal offences, in the absence of any evidence of guilty intention or mens rea even assuming that there were certain lapses on their part. It is not even the allegation of the Prosecution that the Dealers had received any pecuniary benefit or wrongful gain in these transactions. These transactions were entered into in normal course of business. Hence, thee is no evidence of mens rea or guilty intention to attract the charge of criminal conspiracy. 85. It is admitted position that the Dealers had no control or dominion over the funds of SBI Caps. The Debit Authorization Letters were not signed by them, as they were not the authorized signatories. The authorized signatories were PW-23 Nalini Prabhu and Mr. S.V. Naik. They were having control or dominion over the funds of SBI Caps. As deposed by PW-23 Nalini Prabhu, the Deal Operation Report prepared by the Dealer, containing a....
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....ng any Contract Note from the broker or BR or physical security from the counter party, the UCO Bank, he has finalized the Deal Ticket and issued the Debit Instruction Letter and thereby committed the offence of criminal breach of trust punishable under Section 409 of IPC and also the offence of criminal misconduct punishable under Section 13(2) read with Section 1(c) and (d) of the Prevention of Corruption Act, read with Section 120B of IPC. The relevant charges framed against him are Charge Nos.52 to 57. 88. Now, coming first to the transaction dated 07/06/1991 in respect of which Charge Nos.52, 53, and 54 are framed. As deposed by PW-23 Nalini Prabhu, all these transactions were of ready-forward nature and as deposed by PW-38 Deepak Sogani, the decisions in respect of ready-forward transactions in Units and PSU Bonds were taken at higher level by the General Manager Mr. S.V. Naik and the Dealers. According to him, sometimes the deals ware finalized and done by Mr. S.V. Naik also. However, Mr. S.V. Naik being the approving authority, the Deal Tickets were actually not prepared and signed by him, but they were prepared by the Dealers. 89. Here in the case, Accused No.15 S.R. Gup....
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....ager Mr. S.V. Naik and Assistant General Manager PW-23 Nalini Prabhu have signed on this letter and on the receipt of this letter, the SBI has debited the current account of SBI Caps with exactly the same amount as included in the third entry of the Debit Voucher of Rs. 32,62,79,811=33. The statement of account to that effect is duly received and is produced at Exhibit-363. On the receipt of this statement of account, the Back Office has duly passed the entry of payment to UCO Bank in the Investment Register of SBI Caps (Exhibit-377) vide Exhibit-408. This transaction of Rs. 15,25,00,000=00 has been duly reflected in daily Deal Operation Report Exhibit-357. This transaction is clubbed with another transaction for the amount of Rs. 1,01,00,000=00 which was lent to UCO Bank on the same day, vide Deal Ticket No.2947 and shown as lending of Rs. 16,26,00,000=00 through Accused No.2 Harshad Mehta to UCO Bank. The Deal of Rs. 1,01,00,000=00 done vide the Deal Ticket No.2947, as per the last entry on the page containing Exhibit-575, could not be completed and had to be cancelled, but the amount remained to be changed in Exhibit-357. Exhibit-357 is then duly approved by General Manager, Exe....
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....ceived, the allegation for this charge cannot be substantiated. Neither the BR issued Register of UCO Bank nor of SBI has been produced on record to prove that such BR was not received. 98. The Investment Register of UCO Bank is also not produced on record to that effect. As regards the BR Register of SBI Caps, it was introduced only from 01/07/1991 and therefore not relevant to the transaction of June-1991. 99. As regards the transaction dated 28/06/1991, it pertains to the lending of money to UCO Bank for 31 days @ 16.25%. The transaction was for Rs. 25,29,24,657=54 . It has been brought on record through the evidence of PW-38 Deepak Sogani. 100. This Deal Ticket Exhibit-23 is also proved by the Prosecution only through the evidence of PW-1 Ashish Sable and as stated above, he has admitted that he is not acquainted with the signature of Accused No.15 S.R. Gupta. This deal also appears to be executed and processed in normal course of business. The entries thereof are made in the Blue Diary. The Debit Instruction Letters are issued. Therefore, the deal was authorized by two authorized signatories as per Exhibit-324 and 325. The reversal of the transaction took place on due date ....
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.... has failed to prove this charge also. 102. As regards the Charge of criminal conspiracy, the less said is better. If in the entire transaction, it was UCO Bank, which has credited the amount of the Cheques in the account of Accused No.2 Harshad Mehta, that too, without having any disposal instructions to that effect and without informing SBI Caps that the Cheque routing facility was given to Accused No.2 Harshad Mehta by them, when SBI Caps itself has made profit in both these transactions and when it was not the duty or responsibility of Accused No.15 S.R. Gupta either to obtain Contract Note or BRs or physical securities from the counter parties, there is no question of this Accused No.15 S.R. Gupta conspiring with the other Accused, so as to benefit Accused No.2 Harshad Mehta or to cause loss to SBI Caps. At the cost of repetition, it has to be stated that Accused No.15 S.R. Gupta had even no dominion over the funds of the SBI Caps, hence as regards Accused No.15 S.R. Gupta also, it has to be held that the Prosecution has failed to prove its case against him beyond reasonable doubt. Prosecution case against Accused No. 17 P. Murlidharan 103. The case of the Prosecution again....
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.... held by Hon'ble Supreme Court in the case of Kehar Singh (supra) "a few bits here and a few bits there artfully arranged are woefully insufficient to bring home the charge of criminal conspiracy". 108. It is also significant to know that in a suit filed by SBI against Accused No.2 Harshad Mehta and SBI Caps, seeking recovery of the money from Harshad Mehta, SBI Caps had filed a written statement stating that its instructions were not followed in the subject deals by SBI. Therein no fault is alleged against Accused No.4 Ashok Agarwal, Accused No.5 Bandopadhyay or Accused No. 17 Murlidharan. Thus, so far as SBI Caps is concerned, it is categorically admitted by them that the fault lied with the SBI Main Branch and not with any of its Officers in SBI Caps and the evidence on record is also categorical to that effect. Prosecution case against Accused No. 16 Bhushan Raut 109. The charge levelled against him is that, he has counter signed the various cheques issued in this case and issued the cheque for the transaction dated 02/01/1992 Exhibit-172, which was drawn in favour of the Canara Bank in discharge of liability towards CANFINA. 110. At the outset, it has to be observed that A....
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....show that the amount of this cheque was credited to the account of Accused No.2 Harshad Mehta. Thus, there is no evidence proving the diversion of the funds. 113. It is also pertinent to note that, as admitted by PW-7 Suresh Kale, this Cheque dated 02/01/1992 of Rs. 1,80,00,000=00 was prepared by him at the instance of Accused No. 14 Arun Bavdekar, since discharged, and as regards the Cheque issued in favour of CANFINA for the amount of Rs. 60,87,06,635=34, CANFINA is a subsidiary of Canara Bank and has no account with RBI. Hence, the Cheque was issued, on its instructions in favour of Canara Bank. There is endorsement to that effect at Exhibit-438 and as stated above this fact is admitted by PW-27 Vernekar also. Now how the CANFINA or Canara Bank has disbursed the said amount, when it was a Banker's Cheque, Accused No. 16 B.D. Raut has no control over it. Therefore, in respect of this allegation also, it becomes difficult to accept that there was any guilty intention on the part of the Accused No. 16 B.D. Raut. Though the Prosecution has relied upon Debit Voucher for SBI Caps dated 02/01/1992, it is not proved by examining the relevant witnesses. 114. As regards the allegation t....
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.... several other Officers like the Prosecution Witness No.28 U.R. Wakade, who has counter signed the Cheques Exhibit-220 and 221; and other Bank Officers viz. Mr. Mahadevan, who has counter signed Cheques Exhibit-228 and 229. Mr. Agnihotri and Mr. D'Souza who have counter signed such Cheque Exhibit-112, 222 and 225, which are produced on record. However none of them is made Accused in this case. As a matter of fact, the present Accused No. 16 B.D. Raut was also, in the First Charge-sheet, cited as a witness. Though in the second Charge-sheet, he is implicated as Accused, no attempt is made by the Prosecution to differentiate his case with that of other witnesses who have also counter signed the Banker's Cheques. It is not the Prosecution case that he has signed any of the credit or debit Vouchers. It is not even alleged that he has been benefited in any manner by counter signing the Cheques, to attribute any fraudulent intention to him. 117. It is pertinent to note that, PW-15 Virkar has admitted that he has prepared this Debit Voucher at Exhibit-216 dated 07/06/1991 and also the Banker's Cheque at Exhibit-265 which was drawn in favour of UCO Bank. Further this witness has issued th....
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....e account of SBI Caps was debited for the amount of Rs. 67,83,00,000=00 by Accused No.1 R. Sitaraman and instead of making payment to NHB, diverted the said amount by mixing it up with other amounts, totaling around Rs. 93,64,68,150=68 favouring Canara Bank for the credit of CANFINA. According to the Prosecution, Accused Nos.3 Ravi Kumar has issued and Accused No.12 Suresh Babu has prepared this BR Exhibit-274 for the amount of Rs. 67,95,00,000=00 to cover up this fraudulent diversion of Rs. 67,83,00,000=00 by Accused No.1 R. Sitaraman to the account of Accused No.2 Harshad Mehta. 120. In this respect , the basic hypothesis of the Prosecution case is that this transaction was an outright transaction, as stated by Special P.P. in his written notes of argument. However, the evidence of PW-23 Nalini Prabhu, categorically goes to prove that, the SBI Caps used to enter into only ready-forward transactions. Thus, the investigation and the Prosecution has proceeded on a wrong footing. 121. There is also no evidence to show that the BR Exhibit-274 is linked with the transaction dated 02/09/1991. Even a cursory look to the contents of BR Exhibit-274 and the Deal Ticket Exhibit-13 is enoug....
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....e same quantity for the value mentioned in the BR Exhibit-274. He has also admitted that he did not seize the Investment Register of NHB, which would have shown the transactions in NHB Record on that day. 125. Further, PW-34 Mr. Deokumar Chowdhary, has admitted that CANFINA has also issued BR in respect of same transaction as reflected in BR Exhibit-274. He has further admitted that except for BR Exhibit-274, there is no other evidence against Accused No.3 Ravi Kumar. Admittedly, Accused No.3 Ravi Kumar has no role what so ever in SBI making payment to CANFINA. The said payment was made on the basis of the Deal Ticket and the Debit Authorization Letter. Hence, Accused No.3 cannot be said to be having any concern therewith. 126. It is also pertinent to note that the Seizure Memo Exhibit-521 does not contain the BR Exhibit-274. Thus there is no evidence what so ever to show that the said BR was in possession of SBI Caps and it was issued by Accused No.3 Ravi Kumar and Accused No. 12 Suresh Babu to cover up the diversion of funds by Accused No.1 R. Sitaraman to CANFINA. Moreover, admittedly the BR Exhibit-274 is a non transferable and non-negotiable instrument, as admitted by PW-19 ....
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....duly repaid on the reversal date. Hence, the question of diversion of funds does not arise. Since CANFINA had issued the BR in favour of SBI Caps vide Exhibit-437, the question of Accused No.3 having issued the BR Exhibit-274 to cover up the transaction no more remains. 131. As rightly submitted by learned counsel for Accused No.3, except for proving the signature of Accused No.3 Ravi Kumar, on BR Exhibit-274, the Prosecution has not led any evidence with respect to its contents and circumstances, concerning the issuance of said BR. There is also no evidence to prove that, the BR was acted upon by anyone. As a matter of fact, PW-19 Murlidharan has admitted in his evidence that as NHB has not received the funds of the transaction dated 02/09/1991, the said Bank Receipt Exhibit-274 has become infructuous. Therefore, the question of discharge of the said Bank Receipt does not arise. He has further deposed that, if the counter party has not made the payment, mere holding of BR does not confer the rights on the party. 132. Further he has also admitted in his evidence that during the said period, the securities transactions were taking place day-to-day and that too on a large scale. Th....
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....ue were not simultaneous and it was common that the Cheque was delivered later in time. Considering this, there is reasonable evidence to hold that the BR Exhibit-274 was issued in anticipation of the transaction, which was not completed and hence, the said BR ceased to have any effect. Therefore, there was neither any loss caused for issuance of BR to NHB nor any loss caused to SBI Caps by virtue of said BR. There was therefore no pecuniary benefit gained by Accused No.2 Harshad Mehta on account of the said BR. Learned Special P.P. has also fairly conceded that, there is no evidence collected as to what happened to the funds credited to CANFINA. There is also no evidence on record to show that any amount in question went to the account of Accused No.2 Harshad Mehta. 136. In such situation, the possibility cannot be ruled out that SBI Caps tried to enter into the transaction for purchase of 5 crore Units from CANFINA as well as NHB. The BR Exhibit-274 was issued by NHB for such purported transaction. However, as SBI Caps got lower rate from CANFINA that of Rs. 67.5 crore as against Rs. 67.95 crore quoted by NHB, SBI Caps went ahead with CANFINA deal and did not proceed with NHB de....
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....bit-274. There is also no evidence to show that Accused No.3 Ravi Kumar had faced any departmental enquiry in respect of this transaction. 141. There is also no evidence to show that there was any entrustment of the property as required under the law. As held in the judgment of the Common Cause, A Registered Society v. Union of India [1999] 6 SCC 667, relied upon by learned counsel for Accused No.3 Mr. Sabnis, the power to do something does not amount to entrustment. Here in the case there is no allegation of the Prosecution or no evidence to the effect that there was entrustment of any property of NHB to Accused No.3 Ravi Kumar. He had only authority to sign the BR. Therefore mere authority or power to sign the BR is not property in itself and hence, cannot constitute entrustment of property within the meaning of Section 409 of CPC. 142. Though the charge is also leveled against Accused No.3 Ravi Kumar that he has committed the forgery by issuing the BR Exhibit-274 without receipt of consideration, the charge of forgery also cannot be attracted in this case, as it is not the Prosecution case that Accused No.3 Ravi Kumar had no authority to sign the BR on behalf of NHB. It is sig....
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....tention enumerated therein. Here in the case, no such evidence is produced on record by the Prosecution about the intention of the Accused. 146. Thus, the evidence on record is not sufficient to prove the charge of Section 409 or 477 of IPC against Accused No.3 Ravi Kumar. As stated above, except for this transaction, Accused No.3 Ravi Kumar and Accused No. 12 Suresh Babu are not implicated in any other transaction. It is a totally stand alone transaction. There is also no evidence to show that any particular gain was received by Accused No.3 Ravi Kumar, out of any of these transactions so as to implicate him for the offence of criminal conspiracy under Section 120B of IPC. No evidence is at all produced as regards the meeting of minds between these two Accused with other Accused. 147. In view thereof, as regards Accused No.3 Ravi Kumar, it is difficult to hold any of the charge levelled against him in respect of this transaction as proved beyond reasonable doubt. 148. Even as regards Accused No. 12 Suresh Babu, the only allegation against him is that he had prepared this BR Exhibit-274. It is also not disputed that he has prepared it in the normal course of his duties and under....
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....uthority, namely PW-2 Birendra Kumar in respect of the sanction of Accused No. 17 Murlidharan, PW-5 N.G. Pillai in respect of sanction for Accused No.5 Bandopadhyay, the less said is better. They have admitted that they had no knowledge of money market transactions or securities transactions or its working and had accorded the sanction mechanically. 153. As regards PW-18 Radhakrishnan, he has categorically admitted that he might not have been personally aware of what is stated in the sanction order, but it was stated on the basis of the internal record of the Bank. He was not even aware that the complaint in this case was lodged by Accused No.5 Bandopadhyay and did not remember, whether the documents placed before him contain the complaint. He has further admitted that he was the sanctioning authority for the Officers upto scale-3; whereas Accused No.5 Bandopadhyay was working at scale-5 i.e. higher scale officer, which makes him incompetent to grant sanction also. 154. The evidence of PW-3 Mr. Ravi Gupta, who has issued sanction for prosecution of Accused No.3 C Ravi Kumar also goes to show that only on the basis of the material placed before him and even without consulting the ....
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....the relevant facts, material and evidence have been considered by the sanctioning authority Consideration implies application of mind. The order of sanction must ex facie disclose that the sanctioning authority had considered the evidence and other material placed before it. This fact can also be established by extrinsic evidence by placing the relevant files before the Court to show that all relevant facts were considered by the sanctioning authority (See also: Jaswant Singh v. The State of Punjab, 1958 SCR 762 = AIR 1958 SC 12; State of Bihar & Anr. v. P.P. Sharma, 1991 Cr.L.J. 1438 (SC))." 19. Since the validity of "Sanction" depends on the applicability of mind by the sanctioning authority to the facts of the case as also the material and evidence collected during investigation, it necessarily follows, that the sanctioning authority has to apply its own independent mind for the generation of genuine satisfaction whether prosecution has to be sanctioned or not. The mind of the sanctioning authority should not be under pressure from any quarter nor should any external force be acting upon it to take decision one way or the other. Since the discretion to grant or not to grant sa....
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....d Mehta. He has categorically deposed that he was not assisting Accused No.2 Harshad Mehta in Money Market Transactions. He had never undertaken any transaction in Money Market Business. He was active only in Capital Market. Moreover, his office was situated on 15th Floor in Makers Chamber; whereas the Office of Harshad Mehta was situate on different floor. To prove this fact, one witness by name Mr. Vishvesh Bhatt has also been examined. He used to feed the data of the transactions and the deals entered into by the Accused No.2 Harshad Mehta. According to his evidence also, both Accused No.2 Harshad Mehta and Accused No.8 Ashwin Mehta were having different Offices and had no concern with each other. 162. As per the case of Accused No.8 Ashwin Mehta, the signing of Contract Note per se is not an illegal act, especially as a Constituted Attorney of Accused No.2 Harshad Mehta. Except for the signing of the said Contract Note, no other role is attributed to him. The contract was to be performed two months thereafter, on 29/07/1991 and at that time he was no where in the picture. He had neither initiated, nor negotiated, nor concluded the said transaction. As a matter of fact, the Pro....
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....165. In this case, the Accused has tried to produce on record the evidence to probabalise his defence that 25 lakh Units were actually delivered to SBI Caps on 29/07/1991. Accused No.8 Ashwin Mehta has relied upon the BR Register maintained by SBI Caps Exhibit-421 confirming the delivery of 50 lakh Units to SBI Caps on 29/07/1991. Reliance is also placed on the evidence of PW-29 Panchapakeshan, who had confirmed the receipt of securities from SBI on 21/05/1992, as they were personally accepted by him. He has admitted that he has received 3 BRs of 3.5 crore Units in which there is BR No.49 dated 29/07/1991 issued by BOI Finance in favour of SBI Caps. Attention is also drawn to the letter dated 26/09/1992 Exhibit-603 wherein this witness has confirmed that the physical delivery of Units, as per the prevailing market practice, was not accepted in respect of this transaction before Book Closure of UTI on 1st June of the next year, when the Annual Statement of all outright Unit transactions was taken up in May 1992. He has also confirmed that he made enquiry of outstanding Units and BRs from various counter parties, but he could not locate the exact counter party to the deal. It is subm....
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....t that, in none of these proceedings it could be established that the Units remained to be delivered or SBI Caps has suffered any loss on account of these transactions. 170. This Court is not concerned with the Civil litigation but in the present case the fact remains that except for the role that he has signed the Contract Note, no other role is attributed to the Accused No.8 Ashwin Mehta and mere signing of the Contract Note as a Constituted Attorney of Accused No.2 Harshad Mehta, especially when there is no evidence of involvement of this Accused in any other transactions, is not sufficient to prove the charges levelled against him, beyond reasonable doubt. 171. Though the Prosecution has also framed the charge of receipt of stolen property punishable under Section 411 and Section 414 of IPC against this Accused in respect of transactions dated 02/09/1991 and 06/04/1992, there is absolutely no evidence to that effect brought on record by the Prosecution. Not a single Prosecution witness has deposed about the same. The Prosecution has also failed to prove the further diversion of funds from the Account of Accused No.2 to the account of this Accused. As the offence of criminal c....
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....rosecution has to be sure as to whether it was an entrustment of the property in the hands of Accused No.1 R. Sitarman, which he has misappropriated by diverting it to the account of Accused No.2 Harshad Mehta or whether it was a case of cheating, wherein he has obtained the property by misrepresentation with fraudulent intention. The Prosecution has failed to bring on record the evidence to prove either of the charge beyond reasonable doubts. As regards the charge under Section 477A of IPC, in respect of falsification of accounts, again no evidence is produced on record by the Prosecution. There is also no evidence to show that Accused No.1 R. Sitaraman has dishonestly received any stolen property or concealed the same. Therefore, on legal aspects also, the Prosecution has failed to prove the necessary ingredients of the offences alleged against Accused No.1 R. Sitaraman beyond reasonable doubt. 175. Apart from that, the major defect from which the Prosecution case suffers against Accused No.1 is that the Prosecution has failed to prove the sanction for his prosecution. Admittedly, Accused No.1 R. Sitaraman was a public servant, being an employee of the public sector bank, like, ....
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....n, no Court shall take cognizance of such offences against public servant. The said section reads as under. "197. Prosecution of Judges and public servants. (1) When any person who is or was a Judge or Magistrate or a public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty no Court shall take cognizance of such offence except with the previous sanction. (a) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the Union, of the Central Government; (b) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of a State, of the State Government. ..... .... ....." 178. As per the law laid down by th....
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....prosecution of the Accused No.1 R. Sitaraman and in the absence thereof, the entire trial conducted against him becomes vitiated as Accused No.1 did not get any opportunity to challenge the said sanction for non-application of mind, absence of competency in the sanctioning authority to accord such sanction etc. As it was not proved by the Prosecution, no questions about its validity could be asked to Accused No.1 R. Sitaraman in his statement recorded under Section 313 of Cr.P.C. for him to offer explanation therefor or to put up his contentions challenging the same. Hence, if such sanction which is not proved on record, is considered by this Court, it is bound to cause great prejudice to Accused No.1 R. Sitaraman and hence, vitiate the trial. Therefore, assuming that on factual aspects, charges leveled against Accused No.1 R. Sitaraman may be proved, Accused No.1 R. Sitaraman will have to be acquitted for this major lacuna in the Prosecution case, by extending him benefit of doubt. Conclusion :- 183. To sum up therefore, I have no hesitation in holding that the Prosecution has failed to prove its case against all the Accused beyond reasonable doubt. Hence, the order. (i) Accu....