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TMI Blog2009 (8) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 respectively. 3. Whereas Accused Nos. 1 and 2 have been found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger (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 Ltd. (for short, "Growmore") to open an account in UCO Bank, Nariman Poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hotocopy 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. 14,14,00,000. 19. An account in the name of M/s. J.H. Mehta was opened on the same day; the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 thereof. The amount due to the Bank was sought to be realized in that manner. 23. However Mr. V.B. Desa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Instructions on Bill Discounting (Exhibit-239) as also the Circular letter dated 5-9-1988 issued by the Reserve Bank of India (Exh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircular 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 no jurisdiction to pass the impugned judgment of conviction and sentence. (ii)The purported Circular Letter dated 5-9-1988 not being law within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 assuming that Jyoti Mehta, Mazda and Growmore belonged to one group but in terms of the Manual issued by the UCO Bank itself, house loan transactions in favour of persons having t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Exchange with a view to cover up the matter, shares worth Rs. 49.50 crores were purchased from J.H. Mehta; as a result whereof, the said amount was made available to it for the purpose of retiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccused 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 (iii)rights or interests in securities;' 40. Sub-section (1) of section 3 of the 1992 Act provides for appointment and functions of custodian. Sub-section (2) of section 3 enables the custodian, on being satisfied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 of offence sought to be dealt with, should receive a liberal construction. 47. In Harshad S. Mehta v. State of Maharashtra [2001] 33 SCL 536 (SC) this Court held : "The use of different words in sections 6 and 7 of the Act as already no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of Banking policy; or to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interest of the Banking Company; or to secure the proper management of any Banking compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered 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 mandatory in nature. Elaborating this contention, Mr. Cooper submitted that the Banking Companies Act contains provisions which enable the Reserve Bank of India to issue directions which were mandatory and also give advice to the banks. Our attention was drawn to sections 21 and 35A of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 definitions go to confirm that under our legal order "law" does not include only legislative enactments but it also includes rules, orders, notifications etc. made or issued by the Government or any subordinate authority in the exercise of delegated legislative power. 7. The question relating to a post- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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, agent, a factor, broker or an attorney. 2.In his such capacity he must be entrusted with some property or must have gained dominion thereover. 3.He must have committed criminal breach of trust. 74. The criminal breach of trust would, inter alia, mean using or disposing of the property by a person who is entrusted with o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isite 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 bank may earn some profit without investing its own money. Ex facie, the offer appeared to be attractive as it was for the benefit of the Bank but the process involved therein was a complex one. 81. It was insisted that the transaction of such magnitude be carried out from the Nariman Point Branch of the Bank which was not the main branch a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scounting 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. 5) were authorized to execute necessary documents on behalf of the company. Although we do not know the exact time of holding of the meeting of the Bank Authorities vis-a-vis the time when the Resolution was passed but the fact remains that both took place on the same date. Only a few days later, Sunil Samtani (accused No. 7), the Vice President of Mazda and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted 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 name of ANZ Grindlays Bank. The same was complied with Accused No. 7 and Accused No. 9 were handed over: (i) two pay orders in favour of ANZ Grindlays Bank; (ii) receipts for the two cheques received from Syndicate Bank and State Bank of Patiala; and (iii) two usance promissory notes. 93. Indisputably, as on the said date, M/s. J.H. Mehta did not have any account at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change 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 person, his act may be held to be illegal or it may be held that he was legally bound to do an act which he had omitted to do. If a person is guilty of breach of a departmental order, he may be held to be guilty as he was legally bound to act in terms thereof. 98. It does not matter whether the violation was in relation to the Circular issued by the Reserve Bank of India or whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and he was considered good for the limit on his single signature. None of the aforementioned ingredients of Para 2.5(b) of the Manual were satisfied. None of them were customers of the said Branch; the Authorities, namely, PW-44, PW-45 as also PW-1 did know them. Although the past dealings of the accused with the Bank took place at Hamam Street Branch, its records were not called for. So fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 advancing credit to a party. Evidently, therefore, the prudent lending norms were required to be observed. One of the contentions raised by the learned counsel for the appellants was that further security was not necessary as two cheques had been issued by two Scheduled Banks. The cheques were issued for the purpose of earning interest by way of rediscounting. It may be true that whereas the Syndicate Bank and State B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 :- "Round about 26th March, 1992, Mr. Prabhu also asked me to collect the balance sheet of Mazda and Growmore. He told me that it was necessary to send the balance sheets to the Head Office. He had asked me to go to their offices. On 27th or 28th March, 1992, I visited the office of Mazda. Over there I met Mr. Samtani. I requested him to give me the Balance Sheets and the Annual Reports for the last three years. Mr. Samtani told ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 funds. As by reason thereof a shortfall occurred, call money was borrowed from two other banks, namely, Corporation Bank and Oriental Bank of Commerce to the tune of Rs. 50 crores for three days. The evidence of PW-44 in this regard is relevant, which is as under :- "In view of the promissory notes executed by the Bank in favour of Syndicate Bank and Bank of Patiala, on due date our Bank made payments to the two Banks in whose favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onspiracy 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 the meeting of minds of two or more persons for doing an illegal act or an act by illegal means is sine qua non of the criminal conspiracy but it may not be possible to prove the agreement between them by direct proof. Nevertheless, existence of the conspiracy and its objective can be inferred from the surrounding circumstances and the conduct of the accused. But the incriminating circumstances must form a chain of events from which a conclusion about the guilt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn 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 Plan would not per se constitute conspiracy. The offence of conspiracy shall continue till the termination of agreement." {See also P.K. Narayanan v. State of Kerala 1995 (1) SCC 142} :- 124. Offence had been committed purely for the benefit of Harshad Mehta. He was the prime beneficiary. He appears to have made elaborate plans to obtain liquid cash for a short period with a view to enable him to make investments in the security market so that he could obtain quick returns. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof 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 said fact had not been disclosed. On the strength of the opening of the account Mazda and Growmore in the said Branch, two bills were presented. It is, however, of some significance to notice that the original credit note relating to the alleged sale transactions of shares had not been presented, only a photocopy thereof had been presented. A sum of Rs. 50 crores is made available on the same day; no verification or assessment as per procedure is carried out; no security was taken. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Exchange as the Power of Attorney of the proprietors of M/s. J.H. Mehta. It is he who had signed the forms for opening the account with the Nariman Point Branch of UCO Bank. He had signed the letter dated 23-3-1992 requesting the Bank to discount the two Bills of Exchange. The relationship between the parties both personal and professional clearly establishes criminal conspiracy on the part of accused No. 5. We therefore affirm the decision of the Special Judge finding accused No. 5 guilty of the of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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