TaxTMI 
TaxTMI 
2013 (7) TMI 1241
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....eated by Canara Bank. The Andhra Bank and Andhra Bank Financial Services Limited ('ABFSL' for short) made an investment of Rs. 33 crores. Two other transactions were made by the Sahara India and Industrial Development Bank of India ('IDBI' for short) worth Rs. 32 crores. 3. During the said period, accused No.1-B.Raghuvir Acharya was the Trustee and General Manager, accused No.2- T. Ravi was the Fund Manager and accused No.3- Hiten P. Dalal was the approved broker of CMF. 4. Further case of the prosecution is that accused No.3 got Andhra Bank to subscribe for the CANCIGO units of Rs. 11 crores and got ABFSL to subscribe for the CANCIGO units of Rs. 22 crores. The above CANCIGO units worth Rs. 33 crores were purchased in the name of Andhra Bank and ABFSL though the consideration amount for purchase of such units was paid by accused No.3. Accused No.3 got the CANCIGO units purchased in the name of Andhra Bank and ABFSL so as to ensure that he could claim brokerage falsely from CMF. Further, the case of the prosecution is that although the consideration of Rs. 33 crores was paid by accused No.3, the brokers stamp on the applications were affixed in order to induce CMF to pay brok....
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....e of Rs. 40,000/, in default rigorous imprisonment for a further period of six months. Accused No.3 - Hiten P. Dalal Convicted for offence of criminal conspiracy under Section 409 IPC. Rigorous imprisonment for three years and fine of Rs. 20,000/, in default rigorous imprisonment for a further period of 6 months. Convicted for offence under Section 477A IPC. Rigorous imprisonment for three years and fine of Rs. 20,000/, in default rigorous imprisonment for a further period of 6 months. 8. During the trial the Special Court raised 30 points and determined most of them against accused No.1 - B. R. Acharya and accused No.3 - Hiten P. Dalal. The points raised against accused No.2 - T. Ravi, Fund Manager in CMF were answered in his favour and he was acquitted. 9. As against accused No.1, learned Special Court held that the prosecution proved beyond reasonable doubt that letter dated 9th March, 1992 of accused No.3 claiming brokerage was received by accused No.1; endorsement on the letter dated 9th March, 1992 is in the handwriting of accused No.1 and that by the said endorsement accused No.1 acting as the General Manager instructed accused No.2 to pay brok....
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.... well. In spite of this, accused No.3 made false representation by writing letter dated 9th March, 1992 under his own signatures claiming brokerage on the investments of Rs. 65 crores knowing that he had not acted as a broker and he was not entitled to brokerage. Accused No.3 thereby induced CMF to part with payment of Rs. 32.50 lakhs and thereby he committed an offence punishable under Section 411 of IPC apart from offence under Section 409 read with 120-B of IPC and 477-A of IPC. 12. Learned senior for accused No.3 contended that accused No.3 was entitled to brokerage under Rule 36 of the Scheme with respect to investment made by Andhra Bank and ABFSL. It was further contended that he was also entitled for brokerage for the investment made by IDBI and Sahara India as well. As per Rule 36 brokerage can be claimed for 'subscribing or procuring the investment in CANCIGO'. Accused No.3 subscribed and procured the investment of Rs. 65 crores including Rs. 33 crores invested for Andhra Bank and ABFSL. 13. He further submitted that none of the witnesses (PW.4, 5 & 11) positively stated that accused No.3 was not entitled to brokerage on the investment made by Andhra Bank and ABFSL.....
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....mination that it was not the case of the prosecution that any sort of deception was practiced on the trustees and payment was made by them. The IO, therefore, submitted that "there was no question of deception of the Trustees. They have, in fact, authorized accused No.1 and 2 to deal with the funds and pursuant to which Rs. 32.50 Lakhs came to be paid". 17. In so far as IDBI and Sahara's investments are concerned, it is contended on behalf of accused No.3 that the accused No.3 was entitled to brokerage because of the tripartite arrangement between CMF, Citibank and accused No.3. The tripartite agreement entailed accused No.3 and the Citi Bank for procuring investment for CANCIGO. CMF would lend 80% of the amount of subscription to Citi Bank @ 15% for one year and accused No.3 would get brokerage on the investment so procured. PW.11 admits that the scheme was in a financial crunch and it was only because of accused No.3 the money was infused in the financially starved scheme. The material on record also establishes that investment by IDBI and Sahara was at the instance of Citi Bank. The witnesses examined on behalf of IDBI and the Board note Ex.84 clearly show that the said inves....
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....Financial Services Ltd. were credited to the account of the appellant Hiten P. Dalal. Therefore, it is clear for all practical purposes that the CANCIGO units worth Rs. 33 crores were purchased by the appellant Hiten P. Dalal and he transferred these units to CANFINA and CBMF did not raise any objection in respect of transfer of the CANCIGO units by the appellant Hiten P. Dalal. If at all, it was for CBMF to raise any objection but they did not raise any objection to the transfer of the CANCIGO units. xxx xxx xxx xxx xxx xxx xxx xxx 21. So long as CANFINA has no grievance or complaint against the appellant S. Mohan that he acted contrary to their directions and accepted the CANCIGO units and paid the money to the appellant Hiten P. Dalal, no offence is made out against the appellant S. Mohan either of criminal breach of trust or conspiracy. In fact, PW.1(Mr. Kini, Executive Vice-President) has admitted that CANFINA used to regularly deal in CANCIGO units, that neither the Adult nor RBI made any remarks regarding transactions relating to CANCIGO units and all the transactions relating to CANCIGO units were in the ordinary course of business. Neither Canara Bank nor CA....
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....ase. 25. It was further submitted that accused No.3 though never acted as broker in the IDBI and Sahara India, he claimed brokerage from CMF vide letter dated 9th March, 1992 in respect of Andhra Bank, ABFSL, IDBI and Sahara India. 26. The prosecution has proved beyond reasonable doubt that accused No.3 made false representation by writing letter dated 9th March, 1992, (Ex.17) under his own signatures. He claimed brokerage for transactions for which he did not act as a broker. In spite of knowing that he was not entitled to brokerage to the said transactions, he induced CMF to part with payment of Rs. 32.50 lakhs. 27. According to the counsel for the CBI, accused No.3 did not produce any witness in his defence to prove that he was in fact the broker who brought about the purported tripartite agreement with Citi Bank. No official of Citi Bank was named, nor examined in this regard, by accused No.3. 28. Learned ASG on behalf of CBI submitted that assuming that this Court were to disagree with the Special Court and hold that evidence against accused No.1 is lacking, this Court can convict accused No.3 for the charge of conspiracy read with Section 409 IPC with unknown pers....
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.....1 is that he made endorsement on letter dated 9th March, 1992 [Ex.17(i)] in his hand-writing. The prosecution relied on the evidence of PW.5 to prove the said allegation. 33. PW.5-Rajesh Pitamberdas Bhathija claimed to be conversant with the hand- writing of accused No.1 because of some purported/alleged correspondence. The witness contradicted himself whereby in an answer to a previous question he asserted that there was no correspondence with accused No.1. The witness-PW.5 failed to specify as to with whom accused No.1 was in correspondence with. The said witness employs an all encompassing generic term "we had entered into correspondence" which raised doubt. Importantly, no such specific correspondence or material has been placed by the prosecution in support of its bald allegation. 34. In Murari Lal v. State of Madhya Pradesh, (1980) 1 SCC 704 this Court held that in scenarios where there is an absence of expert opinion, a second screening in the form of the court's assessment is essential to ascertain the authorship of document. "12....There may be cases where both sides call experts and two voices of science are heard. There may b e cases where neither side ca....
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....ch means as are open that the opinion may be acted upon. One such means open to the Court is to apply its own observation to the admitted or proved writings and to compare them with the disputed one, not to become an handwriting expert but to verify the premise of the expert in the one case and to appraise the value of opinion in the other case." 38. The prosecution's failure to produce material before the Special Judge on which PW.5 claimed familiarity with the handwriting of accused No.1 is fatal. It can safely be stated that the prosecution has failed to establish the premise of witness in order to allow the Special Court to appreciate the veracity of assertions made by PW.5. 39. In Mobarik Ali Ahmed v. State of Bombay., (1958) SCR 328 at page 342 this Court held as follows: "....It may be proof of the handwriting of the contents, or of the signature, by one of the modes provided in ss.45 and 47 of the Indian Evidence Act. It may also be proved by internal evidence afforded by the contents of the document. This last mode of proof by the contents may be of considerable value where the disputed document purports to be a link in a chain of correspondence, some links ....
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....dwriting Mr. Anil Narichania, AGM. For the reason best known to the prosecution, they have not cited Mr. Anil Narichania as one of the witnesses. Though PW.4, in his examination-in-chief specifically stated that the endorsement [Ex.17(i)] was in the handwriting of Mr. Anil Narichania, he was not declared hostile. We find a blatant contradiction and discrepancy in the evidence of PW.5 who attributes the endorsement to accused No.1 and, therefore, it will not be desirable to rely on his evidence. 43. Apart from the statement of PW.5, there is no material to prove the involvement of accused No.1. As noted above, PW.5's evidence is beset with many unsatisfactory features which renders it clearly unreliable and in any case inadequate to establish the charges levelled against accused No.1. On a close scrutiny of the entire material on record, we have no hesitation to hold that the learned Special Court was not correct in taking the view that the prosecution has successfully established the charges against accused No.1 and wrongly held him guilty for the same. 44. The evidence on record shows that in September, 1991 CMF received, broadly, four applications for purchase CANCIGO units....
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....y. The IO has rightly pointed out in his evidence, repeatedly, that accused No.3 was not concerned with the generation of funds in this case. Applications for allotment were made by Andhra Bank and ABFSL but no entry regarding the transactions were made in the books of Andhra Bank and ABFSL. Therefore, it is clear that accused No.3, to whom Rs. 33 crores belongs got Andhra Bank and ABFSL to apply for the units but kept the said matter hidden by not recording the same. In September, 1991, accused No.3 affixed the brokers stamp on the applications (Ex.19 and Ex.15). Knowing fully well that the investors were not Andhra Bank and ABFSL, he had got officers of Andhra Bank and ABFSL to sign the application forms. Both these officers are accused in other cases. By affixing the rubber stamp of the broker, accused No.3 falsely represented to CMF that he had brought subscriptions from Andhra Bank and ABFSL as a broker and, accordingly, claimed brokerage. Even before September, 1991, he wrote a letter (Ex.18) to Andhra Bank to the effect that units worth Rs. 11 crores would be given to Andhra Bank and ABFSL. They were offered as security for ready forward transaction with ABFSL as evident fro....
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....okers stamp on these applications accused No.3 had wrongfully and dishonestly claimed brokerage on 9th March, 1992. 49. It was the case of accused No.3 that there was prior agreement between him, CMF and Citi Bank under which Citi Bank got the units purchased in the names of Sahara India and IDBI. What is relevant is allotment of units in favour of Andhra Bank, ABFSL, Sahara India or IDBI. It is to be noticed that the ownership of the units is with Andhra Bank, ABFSL, Sahara India or IDBI. It is evident from CANCIGO Certificates that at the expiry of one year, Sahara India and IDBI got CANCIGO units encashed and they have received the entire money in their accounts on the basis that they were the owners of the units. The evidence of PW.2, PW.6 and PW.7 on behalf of IDBI and Sahara India, shows that no broker was involved in the transactions involving purchase of CANCIGO units of Rs. 32 crores face value. The case of the prosecution is very simple that out of four applications for allotment of units, two contained rubber stamp and rest of two applications of Sahara India and IDBI did not bear rubber stamp. The case of the prosecution is that brokerage was dishonestly claimed by a....
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....he question arises as to what will be the effect of acquittal of co- accused Nos.1 and 2 on the case of accused No.3. According to the appellant if co- accused No.1 is acquitted and in view of acquittal of co-accused No.2 no charge under Sections 409, 411 and 477-A substantiate against accused No.3 and he cannot be punished with the aid of Section 120-B IPC. 54. Per contra, according to the learned counsel for the CBI, even if this Court disagrees with the Special Court and holds that the that evidence against accused No.1 is lacking, this Court can convict accused No.3 for the charges of conspiracy read with Section 409 IPC with unknown person or accused No.2 if so established from the available evidence. Alternatively, accused No.3 can be convicted under Section 420 IPC for which a substantive charge had been framed against him. 55. This Court in Devender Pal Singh(supra), held that acquittal of one accused does not raise doubt against conviction of another accused person. A plea that acquittal of the co-accused has rendered the prosecution version brittle has no substance. Acquittal of co-accused on the ground of non-corroboration has no application to the accused himself.....
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.... may be charged with having committed all or any of such offences, and any number of such charges may be tried at once; or he may be charged in the alternative with having committed some one of the said offences. Illustrations (a) A is accused of an act which may amount to theft, or receiving stolen property, or criminal breach of trust or cheating. He may be charged with theft, receiving stolen property, criminal breach of trust and cheating, or he may be charged with having committed theft, or receiving stolen property, or criminal breach of trust or cheating. x x x x x x 237. If, in the case mentioned in section 236, the accused is charged with one offence, and it appears in evidence that he committed a different offence for which he might have been charged under the provisions of that section, he may be convicted of the offence which he is shown to have committed, although he was not charged with it. Illustration A is charged with theft. It appears that he committed the offence of criminal breach of trust, or that of receiving stolen goods. He may be convicted of criminal breach of trust or of receiving stolen goods (as the case may be) thoug....
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..... When a charge under s. 420 I.P.C. could have been framed by the trial Court by virtue of s. 236 Cr.P.C. that Court or the appellate Court can, in law, convict the appellant of this offence instead of an offence under s. 409 I.P.C. if it be of the view that the offence of cheating had been established. This would be in accordance with the provisions of s. 237 Cr.P.C. (17) It is then urged for the appellant that under the proviso to s. 4 of the Act, the Special Court can try any other offence only when the accused is specifically charge with that offence. The language of the proviso does not lead to such a conclusion. It provides for the trial of the accused for any other offence provided the accused could be charged with that offence at the same trial under the provisions of the Code of Criminal Procedure. The proviso does not say that the charge must be framed, though of course, if the trial Court itself tries the accused for a certain offence, it will ordinarily frame a charge. The proviso empowers a Court to try the accused for that offence and has nothing to do with the power of the trial court or of the appellate Court to record a conviction for any other offence whe....