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TMI Blog2018 (12) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... /08/2018 stating that the sanctioning authority Mr. Gordhan Bhojraj Kathuria has expired on 25/01/2018 and therefore, not available for giving evidence. In considered opinion of this Court, if the sanctioning authority was not available, then in that case, the Prosecution could have examined any other witness from the said Department, who was acquainted with the facts of the case or even with the signature of the sanctioning authority and get the sanction proved. The burden was entirely upon the Prosecution to prove the fact that the requisite sanction has been obtained. The Prosecution has however not made any attempt to prove the sanction by examining the subordinate officer or the staff, who has seen the sanctioning authority signing the sanction order or who is acquainted with the signature of the sanctioning authority. Merely, filing the order purported to be the sanction order alleged to have been signed by the competent authority, does not discharge the burden on the Prosecution of proving the sanction, according to law - no hesitation in holding that the Prosecution has failed to prove its case against all the Accused beyond reasonable doubt. Hence, the order. (i) Accused N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on filed against Judgment and such Bonds shall be in force for six months. X X X X Extracts X X X X X X X X Extracts X X X X ..... of securities' during the year 1991-92, as per the following transactions : (a) Transaction dated 29th July 1991 for purchase of 25 lakh units of ₹ 3,37,75,000/- from UCO Bank by SBI Caps. (b) Transaction dated 2nd September 1991 for purchase of 5 crore units of ₹ 67,83,00,000/- from National Housing Bank by SBI Caps. (c) Transaction dated 31st March 1992 for purchase of 1.25 crore units of ₹ 18,75,00,000/- from CANBANK Financial Services Ltd. by SBI Caps. (d) Transaction dated 6th April 1992 for purchase of 1 crore units of ₹ 15,15,00,000/- from CANFINA by SBI Caps. 12. The complaint for this offence was lodged by Accused No. 5 Janardan Bandopahyay himself on 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 Deokum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies on transaction to transaction basis, as per the instructions from the SBI Caps. 16. The Police Report gives various details of the transactions, by which dishonest and fraudulent gains were allegedly made by the accused persons. It also elaborates the modus operandi adopted by them and the details of the criminal acts of the different accused persons. 17. After the Charge-sheet was filed, Accused No. 2 Harshad Mehta died on 31/12/2001 and therefore, the case against him was abated on 17/01/2002. 18. Accused No. 6 M. Subramaniam, Accused No. 13 K. Kailasam and Accused No. 14 Arun N. Bavdekar came to be discharged from the case as per the orders passed by this Court (Coram : Abhay M. Thipse, 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 Seet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itap [Exhibit-536] 'Officers from various other Banks' (06 Witnesses) * PW-8 Chandar Shivaldas Lalla, Deputy Chief Manager (Deposits), Bank of India. [Exhibit-230] * PW-9 Smt. Sindhu Bhatt, Funds Management Cell, State Bank of Saurashtra. [Exhibit-237] * PW-19 B. Murlidharan, Accounts Department, National Housing Bank. [Exhibit-273] * PW-26 R.K. Bijlani, Bank of India. [Exhibit-430] * PW-27 Dhundiraj G. Vernekar, Canara Bank Funds and Investment Sector. [Exhibit-433] * PW-32 Premshankar Mukund Joshi, UCO Bank. [Exhibit-473] 'Broker' (01 Witness) * PW-35 Pravin Babulal Parekh [Exhibit-529] 'Investigating Officer(s)' (02 Witnesses) * PW-34 Dy. S.P. Deokumar Choudhary [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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 120B of IPC ? Negative. 3 Whether the Prosecution proves that Accused persons, except Accused No. 8 Ashwin Mehta, being the public servants have committed the offence of criminal misconduct by dishonestly or fraudulently misappropriating or otherwise converting for their own use the funds of the SBI Caps, entrusted to them or under their control as public servants, and thereby committed the offence under Section 13(1)(c) r/w. Section 13(2) of the Prevention of Corruption Act? Negative. 4 Whether the Prosecution proves that the Accused persons, except Accused No. 8 Ashwin Mehta, being the public servants, by abusing their position as public servants, obtained for them or for accused No. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Branch, regularly. 31. Thus, according to the Prosecution, for execution of the securities transactions, the equal responsibility lied with the Officers of SBI Caps and the Officers of SBI Main Branch. The deal was to be struck by the dealers in SBI Caps, processing of the deals, like its entry in the Blue Diary and preparation and issuance of the debit instruction authorization letter was to be done by the Back Office of SBI Caps, where Accused No. 17 P. Murlidharan was working. On the basis of this work done by the Officers of SBI Caps, further execution was to be done by Accused No. 1 R. Sitaraman and in his absence by Accused No. 16 Bhushan Raut at SBI Main Branch. They had to issue the 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 Prosecuti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank, as per Debit Authorization Letter, it was credited to the account of Accused No. 2 Harshad Mehta, by Accused No. 1 R. Sitaraman, mixing it up with other amounts and totaling the amount to ₹ 5,46,16,577=33, so that it should not be traced. The Contract Note Exhibit-284 in this case is signed by Accused No. 8 Ashwin Mehta, as Constituted Attorney of Accused No. 2 Harshad Mehta. As per the case of the Prosecution, in respect of this transaction, Accused No. 1 R. Sitaraman did not obtain any BR nor received any physical securities. The entry thereof is also not made in the Security Transaction Register of CANFINA Exhibit-434, as deposed by PW-27 D.G. Vernekar. In the Dealing Operation Report Exhibit-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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a transaction of purchase on outright basis, no Contract Note, physical security or BR thereof was received from NHB. Despite that, Accused No. 4 Ashok Agarwal has issued the Debit Instruction Letter vide Exhibit-15 to SBI for making payment of the amount of ₹ 67,83,00,000=00 to NHB. Accused No. 1 R. Sitaraman has, instead of making payment to NHB, diverted the said amount, by mixing it up with other amount, totaling to ₹ 93,64,68,150=68, by issuing Banker's Cheque Exhibit-115, favouring Canara Bank. Accused No. 1 R. Sitaraman has got the entries made in the Purchase Slip Book for this transaction. However, the initial entry was scratched and it was substituted with CANFINA. Thus, he concealed the fact about 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 ₹ 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 ₹ 67,95,00,000=00 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a single Debit Voucher Exhibit-488 for ₹ 54,47,57,260=27 including the amount of ₹ 18,75,00,000=00. However, instead of crediting the said amount to CANFINA, it was credited in to the account of Accused No.2 Harshad Mehta, lying in ANZ Grindlays Bank by Accused No.1 R. Sitaraman by issuing the Credit Voucher/Banker's Cheque for the amount of ₹ 18,75,00,000=00 vide Exhibit-518. According to the Prosecution, therefore, in this case, Accused Nos.1 R. Sitaraman and Accused No.5 Janardan Bandopadhyay are equally liable for making false entries of this transaction and diverting the funds of SBI Caps to the account of Accused No.2 Harshad Mehta. However, to prove that the amount was credited in the account of Accused No.2 Harshad Mehta, 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 ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tead of making payment to CANFINA, the amount was credited to the account of Accused No.2 Harshad Mehta, as per Debit Voucher Exhibit-468. Accused No. 17 P. Murlidhar falsely mentioned in the BR Issued and Receipt Register Exhibit-421 maintained in SBI Caps that BR of CANFINA was received and on due date the same was discharged. But infact no such BR was received, as there was no such transaction with CANFINA. All the documents created are only to divert the funds of SBI Caps to the account of Accused No.2 Harshad Mehta under the pretext of the security transaction. Hence, Accused No.1 R. Sitaraman and Accused No. 17 P. Murlidharan are equally liable in this transaction. However, it is not made clear by the Prosecution as to who has finalized the deal. Its Deal Ticket is not 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 ₹ 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 ₹ 15 crore. The transaction was on ready-forward basis and it was to be reversed on 13/06/1991. The name of the counte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exhibit-324 for the amount of ₹ 2023,39,736=03 and another Debit Authorization Letter Exhibit-325 for the amount of ₹ 5,05,84,931=51. Accused No.1 R. Sitaraman has, on the basis of these two Debit Authorization Letters debited the account of SBI Caps in SBI to the tune of ₹ 25,29,24,657=53. The Credit Vouchers prepared by him for issuance of Cheque favouring UCO Bank are produced on record at Exhibit-123 and 124 respectively; one for the amount of ₹ 22,32,36,564=03 and another for the amount of ₹ 3,97,50,000=00, favouring UCO Bank and ANZ Grindlays Bank. The proceeds of the cheque favouring UCO Bank i.e. Exhibit-84 were credited to the account of Accused No.2 Harshad Mehta in his Current Account No. 1028 with UCO Bank. Similarly, the credits of the Banker's Cheque i.e. Exhibit-85 favouring ANZ Grindlays 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.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sudhir Mehta and Accused No.11 Atul Parekh vide Exhibit-285. Deal Operation Report Exhibit-28 is signed by Accused No.5 Bandopadhyay and PW-23 Nalini Prabhu. The Bank Statement thereof is at Exhibit-364. No entry of this transaction is found in the register of CANFINA Exhibit-434. Accused No.1 R. Sitaraman has however on the basis of the Debit Authorization Letter prepared Debit Voucher for the amount of ₹ 6,70,00,000=00 vide Exhibit-133 and for the amount of ₹ 23,00,000=00 vide Exhibit-134. He has issued Credit Banker Cheque Voucher for the sum of ₹ 69,00,000=00 vide Exhibit-136. He has further issued Banker's Cheque for the sum of ₹ 50,00,000=00 favouring ANZ Grindlays Bank vide Exhibit-105 and another Cheque for the sum of ₹ 19,00,000=00 vide Exhibit-106. Thus, the said amount was ultimately credited to the account of Accused No.2 Harshad 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 havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of ₹ 20 lakhs favouring Grindlays Bank in this transaction was counter signed by Accused No. 16 B.D. Raut. Accused No. 17 Murlidharan has made the entry in the BR register about the receipt of the BR, though no such transaction was infact effected with UCO Bank and UCO Bank had clarified that they had stopped transaction with SBI Caps with effect from 06/05/1990. The Credit Voucher Exhibit-146 and Banker's Cheques Exhibit-147, Exhibit-108 and Exhibit-109 were issued for various amounts in favour of the account of Accused No.2 Harshad Mehta in ANZ Grindlays Bank, Branch of Madurai etc. In this transaction thus Accused No.1 R. Sitaraman, Accused No.16 B.D. Raut and Accused No. 17 Murlidharan are implicated by the Prosecution. 12) Transaction No.12 dated 30/12/1991 This transaction is in respect of 5 deals by SBI Caps with CANFINA for the amount of ₹ 60,47,50,000=00. In this respect, all the Deal Tickets were 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 transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounter party is shown as CANFINA. Accused No.1 R. Sitaraman has prepared the Credit Voucher Exhibit-170 and the amount was diverted to the account of Accused No.2 Harshad Mehta by Credit Voucher. The Cheque are signed by Accused No. 16 Bhushan Raut (Exhibit-170 and 110) to the tune of ₹ 1,80,00,000=00 and in the name of CANARA Bank to the tune of ₹ 59,07,06,757=34 with Credit Voucher No. 171 and Cheque No. 172. The Credit Voucher was prepared by Accused No. 16 B.R. Raut with narration "Purchase of Securities on account of H.S. Mehta". Accused No. 17 Murlidharan has fraudulently mentioned the receipt of BR and its discharge. 15) Transaction No. 15 dated 13/01/1992 It is a purchase transaction wherein Accused No.5 Bandopadhyay has finalized the deal vide Deal Ticket (Not Exhibited) and issued the Debit Authorization Letter (Exhibit-599). The counter party was shown as CANFINA. Accused No.1 R. Sitaraman has debited the amount of ₹ 6,32,07,123=28, but 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 14/01/199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accused No.2 Harshad Mehta. Accused No. 17 Murlidharan has fraudulently mentioned the receipt of BRs from CANFINA and SBI and its discharge. 19) Transaction No. 19 dated 21/01/1992 This transaction is in respect of purchase of the Units of the total value of ₹ 13,55,00,000=00. The deal was finalized by Accused No.5 Bandopadhyay. He has issued Deal Ticket vide Exhibit-58. This amount was debited by Accused No.1 R. Sitaraman from the account of SBI Caps. However, instead of making the payment to CANFINA, the amount was credited to the account of Accused No.2 Harshad Mehta by Banker's Cheques Exhibit-209 to 213 for the various amounts totaling to ₹ 44,30,36,142=71 inclusive of the amount of ₹ 13,55,00,000=00. The Cheque was signed by Accused No. 1 R. Sitaraman and counter signed by Accused No. 16 B.D. Raut. 20) Transaction No.20 dated 29/01/1992 It is again a purchase transaction. The deal was finalized and the Deal Ticket Exhibit-60 and Debit Authorization Letter Exhibit-594 were issued by Accused No.5 Bandopadhyay. It pertains to purchase of 3 crore UTI Units of ₹ 21,00,00,000=00. Accused No.1 R. Sitaraman has issued the Debit Voucher (Exhibit-506) for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of this transaction also, which was infact not executed at all. (24) Transaction No.24 dated 04/03/1992 This transaction pertains to the purchase of the Units for the amount of ₹ 25,43,36,986=30 and ₹ 14,50,00,000=00, totaling for the amount of ₹ 39,93,36,986=30. Accused No.5 Bandopadhyay has issued the Deal Ticket No.4055 (Exhibit-70) and the Deal Ticket No.4056 (Exhibit-71). Accused No.1 R. Sitaraman has debited the account of SBI Caps for the said amount, but diverted the said amount to the account of Accused No.2 Harshad Mehta. 34. To give details of the procedure, which was followed for executing these transactions at SBI Caps, Prosecution has relied upon the evidence of the four witnesses, namely, PW-Ashish Sable, PW-23 Smt.Nalini Prabhu, PW-25 Rahul Shukla and PW-38 Deepak Sogani, who were working in SBI Caps in different capacities at the relevant time. Evidence led by the Prosecution 35. The evidence of PW-1 Ashish Sable goes to prove that in the month of September or October 1991 he was working in the Treasury Department of SBI Caps, where the securities related transactions used to be undertaken. Accused No.4 Ashok Agarwal, Accused No.5 Janarda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence of PW-23 Nalini Prabhu, in case of purchase transactions, it was the responsibility of SBI Main Branch, mainly, Accused No.1 R. Sitaraman to receive the Bank Receipts; even the entry of Bank Receipts used to be made in SBI Securities Division along with the entry thereof in SBI Caps. Accused No. 17 P. Murlidharan used to make entries of the Banker's Receipts in the Book maintained for that purpose in SBI Caps. It is her evidence that in the Blue Diary, the entries were made immediately after the deal was struck. In Investment Register also, the entries used to be made accordingly and then the Investment Register used to be placed before the General Manager for approval. It is categorically deposed by her that SBI had to act on the basis of the debit authorization letter issued by SBI Caps and it could not change the name of the counter party of the said deal or even the amount of the deal mentioned in the debit authorization letter, on its own. 40. PW-25 Rahul Shukla who was also at the relevant time in the Back Office of SBI Caps and who used to receive the Deal Slip from the Dealers in the Front Office, has stated that he was entering the details of the Deal Slip in the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned therein. Once such instructions was received, the responsibility of the Officers in SBI, Main Branch used to commence for completing the further part of the execution of the deal. 44. As regards the procedure adopted in completing the second leg or part of the transaction, which was to be executed at the end of SBI Main Branch, the Prosecution has relied upon the evidence of five witnesses, namely, PW-6 Mrs.Malini Save, PW-7 Suresh Kale, PW-13 Smt.Harsha Shah, PW-15 Ashok Virkar and PW-28 Ulhas Wakade, who were working in SBI, Main Branch, at the relevant time on different posts. 45. The evidence of PW-6 Mrs.Malini Save and PW-13 Smt.Harsha Shah is more or less the same. PW-13 Smt.Harsha Shah used to work in the leave absence period of Ms.Savita Bugade. According to their evidence, their immediate superior was Accused No.1 R. Sitaraman, who used to handle all the securities transactions and also the investment of the Bank. On the basis of the instructions given by Accused No.1 R. Sitaraman, they used to prepare the Vouchers and the Banker's Cheques. Accused No.1 used to give them instructions in whose name these cheques or Vouchers were to be prepared by them. Both of them h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used No. 16 Bhushan Raut was another Officer working in the said Department in the absence of Accused No.1 R. Sitaraman and he has signed on some of the cheques as first signatory. In evidence before the Court he has identified the signatures of Accused Nos.1 R. Sitaraman and Accused No. 16 Bhushan Raut on some of the Cheques and the Vouchers signed by them respectively. 49. The evidence of PW-33 Anil Joshi, at this stage, may be also relevant. He was working at the relevant time in the Sale-Purchase Securities Division of the State Bank of India, Main Branch. According to him also, it was Accused No.1 R. Sitaraman who used to look-after all the transactions of sale and purchase of securities. He was working with Accused No.1 R. Sitaraman as a Clerk. According to his evidence, in case of purchase of securities by SBI Caps, Accused No.1 R. Sitaraman used to gave them the instructions for preparing Vouchers and Slip Books. There were two types of Slip Books. One was pertaining to sale and another was pertaining to purchase. Those Slip Books were in the custody of Accused No.1 R. Sitaraman. In his evidence before the Court this witness has identified the various slips which were prep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favouring the counter party. They were also making note of the transactions in the Transaction Register and in the BR Purchase and Sale Register on the receipt of the BR. 54. According to his evidence, when the instructions from their Bangalore Office were received on telephone, they were noted in the rough note pad and after completion of the transaction, the details thereof were entered into the Transactions Register. The transaction used to be completed on the very same day before 3 pm. After completion of the transaction, in case of purchase, they used to send the Cost Memo to their Bangalore Office, where Mr. Om Prakash, Secretary of CANFINA used to make entries in the Transaction Register. The Prosecution has produced on record this Transaction Register for the period from 22/06/1991 to 16/12/1991 at Exhibit-434. According to him, this register was maintained in their Office at Mumbai. It is his evidence that in this Register there is no entry of these relevant transactions, which are impugned in this case, against the Accused, as no such transactions were entered into by the CANFINA and the name of CANFINA was wrongly and fraudulently shown therein. 55. To prove that thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution has examined PW-29 Panchcapakeshan, the Deputy General Manager of SBI Caps, who has personally verified these transactions after the scam had broken out. According to him, at that time, there was lot of confusion about the exposure of monies to be received by SBI Caps in terms of securities transactions. Therefore, he has taken up the reconciliation work. He went through all the record of SBI Caps, like the Deal Register and the correspondence of the transactions of SBI Caps with SBI. In that process, he found that there were certain BRs which had been issued and there were certain BRs which were held by SBI Caps. In respect of BRs received by SBI Caps, the amount was yet to be received from the counter parties. Accordingly he sent letters to the counter parties and he personally verified with the counter parties. He could get confirmation for many of the deals, but there were several deals which counter parties were not confirming. Hence, as per the directions of RBI, a conference was set-up of all the Banks with counter parties. Even after the conference, there were some of the BRs which counter parties were not confirming. 60. It is his categorical evidence that, during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racy and it has to be inferred from the circumstances proved on record. To substantiate this submission, he has relied upon the judgment of Hon'ble Supreme Court in the case of Ram Narain Poply v. CBI [2003] 42 SCL 275, which was also arising out of the Special Case decided by this Court. It is urged that as held in this judgment, the conspiracy is never hatched in open but by its nature, it is secretly planned and hence, it can be proved even by circumstantial evidence; the lack of direct evidence relating to conspiracy has no consequence. In this judgment, the reliance was placed by the Hon'ble Supreme Court on its earlier decision in the case of Kehar Singh v. State (Delhi Administration) AIR 1988 SC 1883, wherein it was observed that, "Generally, a conspiracy is hatched in secrecy and it may be difficult to adduce direct evidence of the same. The prosecution will often rely on evidence of acts of various parties to infer that they were done in reference to their common intention. The prosecution will also more often rely upon circumstantial evidence. The conspiracy can be undoubtedly proved by such evidence direct or circumstantial. But the court must enquire whether the two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieve the real end, of which every collaborator must be aware and in which each one of them must be interested. There must be unity of object or purpose but there may be plurality of means, sometimes even unknown to one another, amongst the conspirators. In achieving the goal several offences may be committed by some of the conspirators even unknown to the others. The only relevant factor is that all means adopted and illegal acts done must be and purported to be in furtherance of the object of the conspiracy even though there may be sometimes misfire or overshooting by some of the conspirators." 66. According to the learned Special P.P., in the present case there is sufficient material brought on record by the Prosecution to prove that each of the Accused has acted in-connivance with each other and in prosecution of the end object of diverting the funds of SBI Caps to the account of Accused No.2 Harshad Mehta. Their acts may be different and separate from each other but all these acts taken together, have led to the diversion of the funds of SBI Caps to the account of Accused No.2 Harshad Mehta and therefore, all of them are liable for the umbrella charge of criminal conspiracy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for these Accused, the charge of criminal conspiracy, in the present case cannot be held as proved at all. 68. Even as regards the charge for offence under Section 409 of IPC, it is submitted by learned counsel for the Accused that to attract such charge, in the first place, it has to be established that Accused No.4 Ashok Agarwal, Accused No.5 Bandopadhyay and Accused No. 15 S.R. Gupta were having dominion over the funds of the SBI Caps. Admittedly, they were not authorized to issue the Debit Instruction Letters. 69. Learned Special P.P. has, however, by placing reliance on the above said judgment of Ram Narain Poply's case (supra) especially to para No.377 of the said judgment, has submitted that the accused persons cannot take shelter behind the argument that they had followed only the "market practices" in carrying out these transactions. It is submitted that there is no public interest involved in such practices and they cannot be a substitute for compliance with the regularity or statutory prescriptions. According to learned Special P.P., without the Deal Ticket issued by Accused No.4 Ashok Agarwal, Accused No.5 Bandopadhyay and Accused No.15 S.R. Gupta, the Debit Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never be permitted. It is urged that, some of the documents are not even proved by the Prosecution. Only proving of signature on the said documents cannot be sufficient to hold the contents thereof, as proved. 72. Learned counsel for Accused No.3 Mr. Sabnis has, in this respect relied upon the judgment of the Hon'ble Supreme Court in the case of Ramji Dayawala & Sons (P.) Ltd. v. Invest Import [1981] 1 SCC 80, wherein it was categorically held that, "Undoubtedly, mere proof of the handwriting of a document would not tantamount to proof of all the contents or the facts stated in the document. If the truth of the facts stated in a document is in issue mere proof of the handwriting and execution of the document would not furnish evidence of the truth of the facts or contents of the document. The truth or otherwise of the facts or contents so stated would have to be proved by admissible evidence, i.e. by the evidence of those persons who can vouch safe for the truth of the facts in issue." 73. Here in the case, it is submitted that none of the witness examined by the Prosecution has spoken about the contents of the document; conversely they have admitted that they are not aware of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution case. All the Prosecution witnesses are unanimous and unequivocal to the effect that the job of the Dealers was over the moment they finalized the deal and issued the Deal Ticket. Thereafter, it was the job of the Back Office at SBI Caps to process the said transaction, prepare Debit Authorization Letter and make entry thereof in the Blue Diary or Investment Register. The Debit Authorization Letter was to be signed not by the Dealer but by the two authorized signatories of SBI Caps; one of them was PW-23, Smt. Nalini Prabhu, Assistant General Manager in the Back Office and another was the General Manager Mr. S.V. Naik. Debit Authorization Letter was then sent to the SBI, where, it was the responsibility of Accused No.1 R. Sitaraman to issue the Debit Voucher for debiting the account of SBI Caps and Banker' Cheque for disbursal of the amount to the Broker or to the counter party. 78. The evidence on record also proves that the Contract Notes were never received by the Dealers of SBI Caps, but they were to be received by the SBI. PW-23 Nalini Prabhu has deposed that after delivery of the Deal Slip to the SBI Main Branch, the person from the Back Office used to bring from the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and physical securities from the counter party. Only after SBI had obtained these Contract Notes or BRs, they were collected by SBI Caps Officers therefrom, if required; otherwise they remained in the custody of the SBI Main Branch. Hence, once the deal was struck or finalized, the Dealers, namely, Accused No.4 Ashok Agarwal, Accused No.5 Bandopadhyay and Accused No.15 S.R. Gupta had absolutely no control over the subsequent processing of the deal or the issuance of the Cheques or collection of Contract Note or BRs or physical securities. Their role was only to obtain the best rate for SBI Caps and for that purpose to negotiate with the Broker or the counter parties. The Prosecution has not led any evidence to establish that there was any practice or requirement of seeking actual confirmation of the deal from the counter party. On the contrary, the evidence of Prosecution witnesses is categorical that, there was no such requirement or practice of obtaining the counter party confirmation. They have also admitted that, the Dealers used to mention the name of the counter party in the Deal Ticket on the basis of the information given by the Broker. There was no such system of cross ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or wrongly, these Deal Tickets. The Prosecution cannot proceed in this way, especially when there are several loopholes and missing links in the chain of circumstantial evidence. The acts attributed to the Accused taken simplicitor cannot amount to any offence as alleged, unless this chain of circumstantial evidence is established or unless the charge of criminal conspiracy is proved, which again the Prosecution has miserably failed to do. There is absolutely no evidence on record to show that there was any prior meeting of minds amongst these Accused or they had acted in collusion with each other. As a matter of fact, their roles were so well defined and separated that there was no such scope for them to act in collusion. If there was no possibility of the Dealers coming to know whether the Contract Note or BR or physical securities was received by the Back Office or by the SBI Main Branch, they cannot be blamed or held guilty for not obtaining such Contract note or BR or physical securities. That was the job of SBI Main. Moreover, if on the basis of the instructions received from the Broker, they had written the name of counter party in the Deal Ticket and when there was no way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rshad Mehta. If at all those funds were diverted, they were diverted at the end of SBI Main Branch to the Banks where Accused No.2 Harshad Mehta was holding the accounts. However, it becomes difficult to accept that those funds were diverted on account of the Deal Tickets issued by these Dealers or on account of the acts done by them. Even if their role is taken individually or in connection with the role of other Accused, there being several missing links and their role standing far apart from the criminal act which resulted into diversion of funds, applying the essential ingredients of the criminal conspiracy, neither the charge of criminal conspiracy, nor that of cheating or criminal breach of trust, for remain, of the offence under Section 13(1)(c) and (d) read with 13(2) of the Prevention of Corruption Act, can be held to be proved against them beyond reasonable doubt. 87. As regards Accused No.15 S.R. Gupta, he is implicated only in the two transactions dated 07/06/1991 and 28/06/1991. The allegation against him is that in both these transactions, without obtaining any Contract Note from the broker or BR or physical security from the counter party, the UCO Bank, he has final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.R. Gupta, as except for PW-1 Ashish Sable, no one else has established the same or identified the signature of Accused No. 15 S.R. Gupta on these two documents. 91. Moreover, even if it is accepted that these two deals were entered into by Accused No.15 S.R. Gupta and they are signed by him, the evidence on record shows that the deal dated 07/06/1991 was done as a completely normal and genuine deal. By this Deal Ticket Exhibit-356 the amount of ₹ 15,24,78,82=90 has been lent to UCO Bank for 6 days at the rate of 18.25%. PW-9 Sindhu Bhatt has deposed that lending money to UCO Bank was considered safer as UCO Bank was a Nationalized Bank and the solvency of Nationalized Bank is insured by the Government of India. 92. The details of this Deal Ticket Exhibit-356 are duly entered in the Blue Diary by the Back Office Officer. The said entry bears the signature of the General Manager Mr. S.V. Naik in the last column. Accordingly the Back Office has issued the Debit Authorization Letter to SBI Main Branch vide Exhibit-466. The two authorized signatories, being General Manager Mr. S.V. Naik and Assistant General Manager PW-23 Nalini Prabhu have signed on this letter and on the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al way, as it had granted 'Cheque Routing Facility' to Accused No.2 Harshad Mehta. It is thus the UCO Bank, which has directly credited the said amount in the current account of Accused No.2 Harshad Mehta, though no disposal instructions were issued in this respect by SBI. The Investigating Officer PW-34 D.K. Choudhary has admitted that he has not even made enquiry as to why this amount was credited to the account of Accused No.2 Harshad Mehta, in the absence of disposal instructions. 95. Whatever it may be, the UCO Bank has repaid the said amount to SBI Caps on due date with interest of ₹ 4,57,417=81 vide Exhibit-419 on the reversal date. Thus no loss was suffered by SBI Caps or even by UCO Bank in this entire transaction. 96. Now as regards the allegation that Accused No. 15 S.R. Gupta has, without obtaining the Contract Note from Accused No.2 Harshad Mehta issued the Debit Authorization Letter, on this point there is neither any oral evidence nor any documentary evidence to that effect. 97. In this situation, when none of the witness, nor any document proves that the BR for this transaction was not received, the allegation for this charge cannot be substantiated. Neithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence under Section 411 read with Section 120B of IPC that Accused had received the amount of ₹ 20,20,316=00 from Accused No.2 Harshad Mehta by receiving Cheques in the names of his minor children and wife, as rightly submitted by learned counsel for the Accused, not a single document is produced on record to substantiate this charge. Though the Investigating Officer and the Prosecution has been called upon by the Accused to produce the documents pertaining to the Cheques issued by Accused No.2 Harshad Mehta/Accused No.8 Ashwin Mehta, for substantiating these payments, these documents are not produced. Though the Prosecution has examined PW-35 Pravin Parekh who has deposed that 4 to 5 Cheques were drawn by Accused No.8 Ashwin Mehta for share transactions of Accused No.15 S.R. Gupta, during cross-examination this witness has admitted that he had not issued any cheques for the said amount in the name of Accused No.15 S.R. Gupta and he also does not remember whether he had issued any shares of the same value in favour of Accused No. 15 S.R. Gupta. Thus, in the absence of any evidence produced on record, the Prosecution has failed to prove this charge also. 102. As regards th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect on diversion of the funds. If on the basis of the Deal Ticket, he has made entries in the Blue Diary he has done so in the normal course of his business and hence, no guilty intention can be attributed to him. 105. Moreover, the evidence on record proves that, PW-38 Deepak Sogani was also doing same work. He has admitted in his evidence that, if Accused No. 17 P. Murlidharan was not available, he used tot make the entries in the Blue Diary on the basis of the Deal Tickets. Hence, for the same act, he can be made a witness, the Prosecution has not differentiated the case of Accused No. 17 P. Murlidharan to make him Accused in this case. 106. The Prosecution has in this respect failed to prove the mens rea. There is no allegation that he has to derived any wrongful gain or benefit out of the same. 107. As I have discussed above, there is no sufficient evidence on record to prove the incriminating acts on the part of the Officers at SBI Caps, namely, Accused No.4 Ashok Agarwal, Accused No.5 Bandopadhyay, Accused No.15 S.R. Gupta and Accused No. 17 P. Murlidharan, which may have resulted into diversion of the funds. As held by Hon'ble Supreme Court in the case of Kehar Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n witness PW-14 Arvind Rane. The document at Exhibit-470 which is a letter dated 03/01/1992 also goes to prove and it is admitted by PW-30 Vijapurkar also in his evidence that, this facility of routing was not extended to Accused No.2 Harshad Mehta during the period Accused No. 16 B.D. Raut was holding charge. This facility was restarted only from 10/01/1992, after a letter was given from Accused No.2 Harshad Mehta that the facility of single point clearance be restarted. This fact is admitted by PW-16 Anil Padhye also in his evidence. 112. No guilty intention can be inferred from the fact that the Cheque was issued in the name of Canara Bank, as the evidence of PW-27 Vernekar goes to show that the Cheques were to be issued in favour of the Canara Bank, even though the transactions were with CANFINA. Further he has also stated that there was practice of issuing one consolidated cheque for multiple transactions with same counter party Bank. Moreover, once Accused No. 16 B.D. Raut has issued the cheque in favour of Canara Bank for the amount of that cheque, he had no control thereon. No evidence is also produced on record to show that the amount of this cheque was credited to the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er counter signing is entitled to feel more assured about the correctness of the issuance of the Cheque and may not make the same kind of enquiry as the one who originally signs it, may be expected to make. Moreover, the Cheques in question were Banker's Cheques, supposed to be credited in the account of the concerned counter party Bank. The degree of caution expected to be exercised by a person signing or counter signing a Banker's Cheque would not be the same as in the case of a Cheque issued in favour of a private party or individual. He has signed the same in the routine manner as a part of his duty. There was nothing unusual in it. Even if it is accepted that he was not diligent or efficient in discharging his official duty, such lapses on his part would not attract the criminal liability, in the absence of any material showing the requisite mens rea on the part of the Accused". The case of the Accused stands at par with Accused No. 14 Arun Bavdekar. Accused No.13 K. Kailasam has also been discharged by this Court for playing similar role, vide order dated 11/06/2015. 116. Moreover, it is also brought on record that, there are several other Officers like the Prosecution Witne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination, he has categorically admitted that, he has not verified any of the documents. He has not personally met the Accused. He was also not aware of the securities transactions. It is merely on the basis of the statement made by Deputy General Manager, he has stated that the Cheques were counter signed by the Accused. He has admitted that he does not remember whether the CBI had informed him that Accused No. 16 B.D. Raut was cited as a witness in this case. He also does not remember which documents were placed before him along with the note. Therefore, it is clear that there is total non application of mind on his part, while issuing of the sanction order and hence, on this point also, the benefit of doubt needs to be extended to Accused No.16 B.D. Raut. Prosecution case against Accused Nos.3 C. Ravi Kumar and Accused No. 12 Suresh Babu 119. Accused No.3 Ravi Kumar and Accused No.12 Suresh Babu are tried only in respect of a single transaction dated 02/09/1991 for issuance of BR Exhibit-274. As per the Prosecution case, Accused No.4 Ashok Agarwal finalized the deal with NHB and issued Deal Ticket Exhibit-13. Accordingly, the account of SBI Caps was debited for the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of amount and the rate. According to her evidence also, the amount mentioned in BR Receipt must match with the sale price mentioned in the Deal Ticket. 123. For that matter, even PW-29 Panchapakeshan, who has carried out the work of reconciliation, has also admitted in his evidence that the amount mentioned in BR should tally with the amount mentioned in the Deal Slip. According to him, as the amount mentioned in the BR Exhibit-274 was not tallying with the Deal Ticket Exhibit-13, SBI did not write any letter, asking for the amended BR. PW-1 Ashish Sable has also admitted that BR should be of the same amount, as mentioned in the Deal Ticket. 124. Even PW-34, Investigating Officer, Mr. Deokumar Chowdhary, has also admitted that the purchase price in the Deal Ticket Exhibit-13 and BR Exhibit-274 are different. However, he has connected both these documents only because the name of the security and the date mentioned therein was the same. At the same time, he has also admitted that there used to be thousands of transactions taking place on daily basis and he had not checked NHB Records to verify whether there was no other transaction on the same date of the same quantity for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibit-437 is the BR issued by CANFINA in favour of SBI Caps for sale of Units, having face value of ₹ 50,00,00,000=00 at the rate of 13.5000 per Unit for the sale price of 5 crore Units. Exhibit-438 is the Cost Memo, issued by CANFINA for the said transaction. On the same day SBI Caps had another transaction with CANFINA in respect of 9% IRFC Bonds for the price of ₹ 26,14,68,150=68 along with accrued interest of ₹ 94,93,150=00. For the consolidated amount consisting of 5 crore of UTI Units and IRFC transaction the Cheque for the amount of ₹ 93,64,00,000=00 was issued by SBI on behalf of SBI Caps. These two transactions are duly recorded in the Transaction Register Exhibit-434 of CANFINA, as deposed by PW-27 Vernekar. 130. This evidence therefore clearly shows that the credit of the payment of the amount of ₹ 93,64,68,150=68 by SBI Caps to CANFINA was towards the aforesaid two transactions and had nothing to do with the BR Exhibit-274. The evidence of PW-27 Vernekar further proves, vide Exhibit-442 and 444 that the said transaction with CANFINA was reversed on 17/09/1991 and both the BRs were returned to CANFINA duly discharged. Thus, the amount paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3. Infact NHB as a corporate authority has never disowned the BR, nor made any complaint about the same either with CBI or otherwise. 134. Though the Prosecution has, in its written submission stated that, in the statement of account of Accused No.2 with SBI Exhibit-263 there is an entry of ₹ 67,83,00,000=00, as rightly pointed out by learned counsel for Accused No.3, Exhibit-263 does not show any such entry of ₹ 67,83,00,000=00, but shows the amount of Debit on 02/09/1991 for around ₹ 30,00,000=00. Thus, on this aspect also there is discrepancy going to the root of the matter. 135. Moreover, as per the Prosecution case, BR was delivered by Accused No.3 Ravi Kumar to Accused No.7 Hiten Mehta, since discharged, for its further delivery to Accused No.1 R. Sitaraman. However, there is absolutely no evidence to that effect. As stated above, the Seizure Memo of the documents seized from SBI does not show that this BR was seized from SBI Caps or SBI. Accused No.7 Hiten Mehta has already been discharged and the Prosecution has not brought evidence about delivery of BR to him. According to the evidence of the defence witness Gopal Shankar Iyer, as per the prevailing pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriation of the entrusted property with dishonest intention. As held by the Hon'ble Apex Court in the case of S. Mohan v. CBI 10 (2008) 7 SCC 1, the charge of criminal breach of trust is not maintainable, unless the victim of the alleged breach of trust has a grievance or complaint against the Accused. In the said judgment, which was also arising out of the securities scam, it was held that, "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 " 139. It was further held that, "Neither Canara Bank nor CANFINA had initiated any disciplinary proceedings against Appellant. They have also not disputed the genuineness of the CANCIGO units which were got encashed by the appellant Hiten P. Dalal .....…... In the circumstance, no ingredient of criminal breach of trust is made out against either of the appellants." 140. In the present case also, it is admitted position that no loss was caused to the NHB and NHB had not mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of causing it to be believed that such document has been made by a person, by whom the person falsifying the document knows that it was not made. Clearly the documents in question in the present case, even if it be assumed to have been made dishonestly or fraudulently, had not been made with the intention of causing it to be believed that they were made by or under the authority of some one else. The second criteria of the section deals with a case where a person without lawful authority alters a document after it has been made. There has been no allegation of alteration of the voucher in question after they have been made. Therefore in our opinion the second criteria of the said section is also not applicable to the present case. The third and final condition of Section 464 deals with a document, signed by a person who due to his mental capacity does not know the contents of the documents which were made i.e because of intoxication or unsoundness of mind etc. Such is also not the case before us. Indisputably therefore the accused before us could not have been convicted with the making of a false document. " 145. Further it is submitted that the offence of forgery deals with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, if he has prepared the BR in good faith, under the instructions of his superior, it becomes difficult to accept the case put up by the Prosecution against him. 151. It is also pertinent to note that, NHB has not initiated any disciplinary enquiry against him, nor there is allegation that Accused No. 12 Suresh Babu has directly or indirectly derived any benefit from the subject transaction. Thus, considering the overall evidence brought on record, in this case, as regards transaction No.2, which is a stand alone transaction, it has to be held that neither the transaction itself is proved beyond reasonable doubt; nor the Prosecution has succeeded in proving the allegations leveled against these two Accused beyond reasonable doubt. Hence, they deserve to be acquitted. Want of valid sanction 152. In respect of these five accused Nos.3, 5, 12, 15 and 17 also, who are prosecuted as public servants, there is major lacuna in the Prosecution case, which pertains to lack of valid sanction. The evidence of none of the sanctioning authority goes to show that they have either applied their mind independently to the material placed before them, or were aware of the factual aspects of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Supreme Court in the case of Basdeo Agarwalla v. Emperor AIR 1945 FC 16, that, "the sanction under the Act is not intended to be, nor is an automatic formality and it is essential that provisions in regard to the sanction should be observed with complete strictness". 157. In the case of Mohd. Iqbal Ahmed v. State of A.P. [1979] 4 SCC 172 the Hon'ble Supreme Court has explained the necessity and importance of valid sanction as under: "Sanction lifts the bar for prosecution. The grant of sanction is not an idle formality or an acrimonious exercise but a solemn and sacrosanct act which affords protection to government servants against frivolous prosecutions. Sanction is a weapon to ensure discouragement of frivolous and vexatious prosecution and is a safeguard for the innocent but not a shield for the guilty." 158. Learned counsel for the Accused has relied upon the judgment of the Hon'ble Supreme Court in the case of Mansukhlal Vithaldas Chauhan v. State of Gujrat [1997] 7 SCC 622 wherein the Hon'ble Supreme Court was pleased to observe in para No. 18 and 19 as follows; '"18. The validity of the sanction would, therefore, depend upon the material placed before the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Sections 409, 411, 467, 468, 477 read with Section 120B of IPC and Section 13(1)(c) and (1)(d) read with 13(2) of the Prevention of Corruption Act, read with Section 109 of IPC. 161. The main allegation levelled against Accused No..8 Ashwin Mehta is that he has signed the Contract Note dated 29/05/1991 Exhibit-284 (only signature portion is exhibited) in respect of delivery of 25 lakh Units to be made to SBI Caps on 29/07/1991 i.e. after the period of two months. According to the Prosecution case, infact no such Units were delivered to SBI Caps on the stipulated date and thus in this transaction Accused No.8 Ashwin Mehta and Accused No.1 R. Sitaraman aided and abetted Accused No.4 Ashok Agarwal in the commission of the offence of criminal breach of trust. It is not disputed by Accused No.8 Ashwin Mehta that he has signed this Contract Note Exhibit-284. However, according to him, he has signed the same as a Constituted Attorney of Accused No.2 Harshad Mehta. To prove this fact, he has examined himself on oath. According to his evidence, he had no relation with Accused No.2 in the impugned money market transactions, save and except this transaction wherein he has signed the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 Sudhir Mehta have been discharged by this Court on the ground that except for signing of the Contract Note, no other role was attributed to them. Similarly, Accused No. 10 Pankaj Shah and Accused No.11 Atul Parekh were also discharged on the same count that except for signing of the Contract Notes, they have not played any other role. 164. Accused No.8 Ashwin Mehta has also produced on record at page No.88 the Chart of the cases in which he himself was acquitted or discharged for playing the same role. For example, in Special Case No.1 of 1996 he came tobe discharged and in Special Case No.4 of 1996, he was acquitted by this Court vide order dated 12/04/2006 and the said order was confirmed by the Hon'ble Supreme Court. For the similar role played by one Sudhir Mehta, he was acquitted and discharged in Special Case No.1 of 2001. The certified copies of those orders are also produced on record, which prove that if the other Accused can be acquitted or discharged for the same role, the Accused No.8 Ashwin Mehta also cannot be held liable for the offence, in the absence of any evidence, proving that except for signing the Contract Note, he has played any active role in finalizing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 50 lakh Units from BOI Finance. 167. Be that as it may there is substance in the submission of Accused No.8 Ashwin Mehta that, even assuming that the Units were not delivered, that does not per se establish the offence alleged by the Prosecution, considering that Accused No.2 Harshad Mehta had regularly undertaken transactions with SBI Caps. 168. It is also the case of Accused No.8 Ashwin Mehta that in respect of the transaction dated 09/08/1991 he was also prosecuted in Special Case No.1 of 1996 on the count that he was signatory thereto, for and on behalf of Accused No.2 Harshad Mehta. However, as the Prosecution failed to establish any prima facie case against him, he came to be discharged from the said case. The CBI challenged the said order by filing Criminal Appeal No.1218 of 1998 which came to be dismissed by the Hon'ble Supreme Court on 19/09/2001. 169. Accused No.8 Ashwin Mehta has also placed reliance on the certified copies of the Civil Suit No. 41 of 1995 and MA No. 185 of 1993 wherein SBI had sought recovery of ₹ 105.11 crores against Accused No.2 Harshad Mehta and SBI Cap; and the Civil Proceeding of MA No.201 of 2011, MA No..195 of 2011 and MA No.136 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by PW-5 N.G. Pillai, credited the proceeds of sale of securities first in SBI's own account maintained with RBI and subsequently transferred to the account of Accused No.2 Harshad Mehta. The evidence on record also proves that in some transactions, even without instructions of disbursal, the amount was splitted and credited to the account of Accused No.2 Harshad Mehta by his concerned Bank. As rightly submitted by Accused No.1 R. Sitaraman in these transactions, he cannot be held liable for the charge of diverting of the funds. 173. Moreover, on factual aspects, even if the case against Accused No.1 R. Sitaraman appears to be proved, on legal aspects it has to be held that the Prosecution has failed to prove its case against him also beyond reasonable doubt. In the light of the various gaps and the missing links left open by the Prosecution, may be on account of death of Accused No.2 Harshad Mehta and the discharge of many of the Accused in the case from time to time, the fact remains that the charge of conspiracy could not be proved. 174. As regards the charge under Section 409 and 420 of IPC as rightly submitted by the Accused, both these charges cannot go together hand in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovable from his office save by or with the sanction of the State Government, of that Government; (c) in the case of any other person, of the authority competent to remove him from his office." 176. Thus, the plain reading of Section 19(1) of the Prevention of Corruption Act, leaves no manner of doubt that the same is couched in mandatory terms and forbids Courts from taking cognizance of any offence punishable under Sections 7, 10, 11, 13 and 15 against public servants, except with the previous sanction of the competent authority It is held by the Hon'ble Supreme Court in the case of Nanjappa v. State of Karnataka [2015] 14 SCC 186 relied upon by Accused No.1 R. Sitaraman that, Section 19(1) of the PC Act would operate in absolute terms. The language employeed in Section 19(1) admits of no equivocation and operates as a complete and absolute bar to any Court taking cognizance of any offence punishable under Sections 7, 10, 11, 13 and 15 of the Act against a public servant, except with the previous sanction of the competent authority. 177. Even for the offences punishable under Sections 409, 420, 177A or 120B of the Code of Indian Procedure, Section 197 of the Code of Criminal p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or it might be proved by independent evidence, that the sanction was accorded for prosecution after those facts had been placed before the sanctioning authority. 181. The Prosecution has however not made any attempt to prove the sanction by examining the subordinate officer or the staff, who has seen the sanctioning authority signing the sanction order or who is acquainted with the signature of the sanctioning authority. Merely, filing the order purported to be the sanction order alleged to have been signed by the competent authority, does not discharge the burden on the Prosecution of proving the sanction, according to law. No explanation is offered at all by the Prosecution for non examining any of the witness on this aspect, at-least to state that the sanctioning authority was the competent authority to grant such sanction. The Prosecution has not even proved this sanction through the evidence of Investigating Officer, who had obtained the said sanction. 182. Therefore, the fact remains that there is no sanction proved on record for the prosecution of the Accused No.1 R. Sitaraman and in the absence thereof, the entire trial conducted against him becomes vitiated as Accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Section 411 and 414 read with Section 120B of IPC.
(vi) Bail Bonds of all the Accused persons stand cancelled. However, as per Section 437A of Criminal Procedure Code, 1973, they are directed to execute fresh P.R. Bonds and Surety Bonds for the amount of ₹ 25,000/-each for their appearance before the Hon'ble Supreme Court, as and when notice is issued to them in respect of any Appeal or Petition filed against Judgment and such Bonds shall be in force for six months.
184. Accused No.1 R. Sitaraman, Accused No.3 C. Ravi Kumar, Accused No.4 Ashok Agarwal, Accused No.5 Janardan Bandopadhyay, Accused No.8 Ashwin Mehta and Accused No.12 Suresh Babu are granted three weeks time to furnish cash surety of ₹ 25,000/- each.
185. Accused No.15 S.R. Gupta, Accused No. 16 B.D. Raut and Accused No. 17 P. Murlidharan were released on bail on furnishing PR Bonds and Cash security of ₹ 25,000/- each. Same security be continued for the period of six months for their appearance before the Hon'ble Supreme Court, as and when the notice is issued to them in respect of any Appeal or Petition filed against Judgment and such Bonds shall be in force for six months. X X X X Extracts X X X X X X X X Extracts X X X X
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