9911796707
TMI Blog2008 (5) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 409, IPC and was sentenced to undergo rigorous imprisonment for seven years and a fine of Rs. 1 lakh, and with default, sentence for a period of one and a half year. He was also found guilty of the offences punishable under sections 13(1)(c) and 13(1)(d) read with section 13(2) of the Prevention of Corruption Act and for this offence he was sentenced to undergo rigorous imprisonment for a period of five years and a fine of Rs. 50,000, in default of payment of fine, sentence for a period of one year. He was also found guilty of the offence punishable under section 411 read with section 120B, IPC and sentenced to undergo two years RI and a fine of Rs. 50,000 and in default sentence for six months. The appellant in Criminal Appeal No. 910 of 1998 (fourth accused-Hiten P. Dalal) was found guilty of offences punishable under section 409 read with section 120B, IPC and sentenced to undergo seven years rigorous imprisonment and a fine of Rupees 1 lakh and with default, sentence for a period of one and half years. He was also found guilty of an offence punishable under section 411, IPC and was sentenced to undergo imprisonment for a period of two years and a fine of Rs. 50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued units known by the name 'CANCIGO' in the shape of credit sheets which provided a fixed rate of interest with a stipulation that these credit sheets may not be transferred for a period of one year. The CANCIGO Units could be encashed only after the completion of this lock-in period of one year from the date of issue. The scheme was operated under the Rules framed by Canbank Mutual Fund. One of the rules so framed imposed a restriction on the transfer of these units but it permitted transfer of units to the heirs in case of death of the holder and also in special circumstances. 5. On 28-8-1991, Accused No. 4 wrote to Andhra Bank enclosing an application form for CANCIGO Units worth Rs. 11 crores requesting the Bank to sign the application on his behalf. On 29-8-1991, Andhra Bank Ltd. applied to the Canbank Mutual Fund, at the request of the appellant Hiten P. Dalal, for the purchase of CANCIGO units of the face value of Rs. 11 crores. A cheque drawn by the appellant Hiten P. Dalal for the sum of Rs. 11 crores was sent along with the application. The application was signed by one Dhankumar on behalf of Andhra Bank Ltd. Similarly, on Sepetember 14, 1991, the same appellant Hiten P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged with having entered into a criminal conspiracy for committing the offence of cheating and criminal breach of trust and falsification of accounts and the offences under section 13(1)(c) and 13(1)(d) read with 13(2) of the Prevention of the Corruption Act. 8. Under the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992, Special Court was established for the speedy trial of cases relating to transactions in securities and disposal of properties attached. The Special Court declared accused Hiten P. Dalal as a 'notified person' under this Act. Before the Special Court, the Custodian made an application that CANFINA be ordered to handover to him, the CANCIGO Units worth Rs. 33 crores with accrued interest thereon. The Custodian contended that Accused No. 4 could not have transferred the CANCIGO Units which were not standing in his name and the entire transaction was tainted with illegality. He contended that therefore, no title was transferred to CANFINA; and that as title remained with accused No. 4, he was entitled to the said CANCIGO units. Before the Special Court, the appellant Hiten P. Dalal and the Andhra Bank and the Andhra Bank Financial Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 willfully suffers any other person so to do, commits 'criminal breach of trust'." Section 409, IPC deals with criminal breach of trust by public servant, or by banker, merchant or agent. 10. Here, the CANCIGO Units stood in the name of the Andhra Bank and Andhra Bank Financial Services Limited. They apparently entrusted this property to accused No. 4 and allowed him to encash the same. In fact, Accused No. 4 had paid the consideration for purchasing the CANCIGO Units in the names of Andhra Bank and Andhra Bank Financial Services Ltd. It is true that if a person entrusted with property dishonestly misappropriates that property, such misappropriation in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which the person has made in regard to discharge of such trust, will be guilty of criminal breach of trust. According to the prosecutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t created was also to be recognized. 39. Condition 19 creating a bar on transfer has to be construed in the aforementioned context. The bar on transfer created was to have the effect that the same would not be binding on Canbank Mutual Fund as it was not bound to take any notice thereof and only the holder shall be recognized as having the right, title or interest on the CANCIGO. 40. CANCIGO's indisputably are valuable securities. They are otherwise capable of being transferred in terms of the established business practice, the Sale of Goods Act or the Transfer of Property Act. No legal bar has been created in transfer of the said securities. The scheme, thus, does not and could not have created an absolute legal bar on transfer of the CANCIGO's so as to invalidate the same. 41. The rules and regulations framed by Canbank Mutual Fund and the notes appended to the CANCIGO credit sheet differ in material particulars. Rules and regulations explain as to why an embargo on transfer has been placed i.e., not to recognize Respondent 2 for the dividends or for other liabilities arising out of transfer. A transfer violating the rules and regulations would only have the effect of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the prosecution case is that he had telephonically informed PW 6 Mr. Vernekar to accept the CANCIGO Units. PW 6 Vernekar is an Officer of the Canara Bank who had been authorized by the Board Resolution to deal in Securities/Bonds and execute securities transactions on behalf of CANFINA. He deposed that he used to receive telephonic instructions from Bangalore and recorded these instructions in rough transaction sheets. He has proved the rough transaction sheets including the rough transaction sheet on which Ex-51A has been noted. PW-6 deposed that the Entry pertaining to purchase of CANCIGO Units of the face value of Rs. 33 crores from accused No. 4 was made on the basis of the instructions received from accused No. 3 namely, appellant S. Mohan. He also deposed that the appellant S. Mohan sent an Inter Branch Advice No. 32894 by which the funds were transferred in Bangalore to Bombay in order to facilitate the payment. He deposed that the date 6-2-1992 was written because CANFINA Bangalore had purchased CANCIGO Units of face value of Rs. 33 crores on 6-2-1992. He also deposed that appellant S. Mohan had told him that a sum of Rs. 25,01,67,129 was recoverable from accused No. 4 ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en property or retained the same. No ingredients of this offence have been proved against him. So long as the prosecution admits that the CANCIGO Units worth Rs. 33 crores were purchased by making use of the money owned by him, they were not stolen property in the hands of the appellant Hiten P. Dalal. Neither, the Andhra Bank nor the Andhra Bank Financial Services Limited has any case that these CANCIGO Units were stolen by the appellant Hiten P. Dalal. As the offence of Criminal Breach of Trust is also not made, the conviction of the appellant under section 411 is not sustainable and is liable to be quashed. So also, the appellant S. Mohan is not liable for the conspiracy to commit offence under section 411, IPC. 17. The appellant S. Mohan has been found guilty of offence punishable under section 13(1)(c) and 13(1)(d) read with section 13(2) of the Prevention of Corruption Act. This appellant was one of the Asstt. Vice-Presidents of the CANFINA dealing with CANCIGO Units. There is no allegation that he committed any illegality. The allegation against him is to the extent that he accepted the CANCIGO Units though they stood in the name of the Andhra Bank and Andhra Bank Financial ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
