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TMI Blog2025 (2) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... Trial Court, it is surprising as to how the appellant can be convicted for committing offence under Sections 120B and 411 of the IPC. Once the courts below have found that the seized gold bars, (Article 2) are not the same gold bars, conviction under Sections 120B and 411 of the IPC cannot be sustained. The High Court impliedly held that witnesses connected with M/s CN have failed to identify the seized gold. However, in the opinion of the High Court, the same is not relevant because the appellant has failed to prove lawful acquisition of gold. It is failed to understand, when the prosecution has failed to prove the identity of seized gold as being the same gold which were sold by M/s. CN to M/s. Globe International, how the appellant is liable to prove lawful acquisition of gold visà- vis the stolen gold. In Mohan Lal vs. State of Maharashtra [1979 (4) TMI 178 - SUPREME COURT], this Court held that the prosecution has to prove that the accused was in possession of property which he had reason to believe that it was stolen property. Conclusion - In view of the fact that the identity of the seized property being the stolen property has not been established, Vijaya Bank is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account holder was dispensed with, and the account was opened. 2.2 It is the case of the prosecution that the documents submitted at the time of account opening were forged and the person representing the firm namely, Surendra Jain or the firm Globe International were fictitious. The account was eventually opened on 06.02.1997. On 25.04.1997, Nasik Branch received TT of Rs. 10,00,000/- in the account of Globe International and thereafter till 28.07.1997, 11 TTs were sent from Delhi issued by Vijaya Bank, Ansari Road Branch, New Delhi. On 06.08.1997, Vijaya Bank, Nasik Branch received TT of Rs. 4,00,000/- which was credited to the account of Globe International. Thus, total amount of Rs. 6,70,00,000/- was credited in this account. Simultaneously, with the credit of TT amount, the same was withdrawn and subsequently, the TTs were found to be bogus and forged and the entire fraud was committed not only by accused nos. 1 and 2 but was done with the help of absconding and unknown persons like Mukesh Shah @ Mayur Desai or Ashok Agarwal @ Surender Jain and so on. On 12.08.1997, it was found that no payment of the said TTs was ever made at Vijaya Bank, Ansari Road Branch, Delhi. On this d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 2 was held guilty under Section 403 of the IPC. The accused no. 3 was held guilty of the offence punishable under Section 120B of the IPC as well as under Section 411 read with Section 120B of the IPC. The Trial Court directed that the muddemal articles consisting of 205 gold bars be returned to the accused no. 3. 5. While the accused persons preferred separate appeals challenging their conviction and sentence, the CBI preferred Criminal Appeal No. 638 of 2006 for challenging that part of the judgment of the Trial Court by which the gold bars were returned to accused no. 3. Criminal Appeal No. 363 of 2009 has been preferred by Hiralal Babulal Soni challenging the order regarding return of gold bars to accused no. 3. 6. The High Court under the impugned judgment has allowed the Criminal Appeal preferred by accused nos. 1 and 2 and their conviction and sentence has been set aside. The Criminal Appeal No. 428 of 2006 preferred by accused no. 3 (Nandkumar Babulal Soni) was dismissed. The Criminal Appeal No. 363 of 2009 (converted from Criminal Application No. 463 of 2007) preferred by Hiralal Babulal Soni was also dismissed. The Criminal Appeal No. 638 of 2006 preferred by CBI c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 as well as the order of the High Court regarding the custody of the gold bars be upheld. The nature of fraud - "Telegraphic Transfer" 11. At the relevant time, Vijaya Bank offered a service facility to all its customers whereby money could be remitted through the means of "Telegraphic Transfer" (TT). If a customer desired to remit funds urgently from one place to another, he could deposit cash and request the remitting branch to send the amount to the credit of a particular account. Upon receipt of money, the remitter branch would generate a code which was then sent via telegram to the concerned branch in which account of the beneficiary was operational. Upon decoding, the receiving branch would then credit the amount to the account of the beneficiary and send "Bank adjustment Requisition Form" (BARF) to the remitting branch which upon receiving the BARF would send a credit advice to the receiving branch. Role of different persons including the accused : 12. One unknown person representing M/s. Globe International with its sole Proprietor being one Surender Kanti Lal Jain approached the bank for opening an account. Despite several irregularities in the process of opening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant/accused no. 3 was summoned by the CBI after 1½ years i.e. on 03.02.1999. However, he denied his involvement in the alleged crime. After nearly 4 years i.e. 24.05.2001, the CBI conducted a search in the shop of appellant/Accused No. 3 on 28.05.2001. However, in the absence of appellant/Accused No. 3, the shop was sealed. On 30.05.2001, appellant/Accused No. 3 requested the Investigating Officer for removing the seal mentioning in his communication the details of cash, gold (in stock). The 205 gold bars mentioned in appellant/Accused No. 3's communication dated 30.05.2001 were later on seized by the CBI on 01.06.2001. The details of 205 gold bars were as under: (i) 110 T.T. bars of ARY make; (ii) 30 T.T. bars of HARMONY make; (iii) 57 T.T. bars of Johnson Mathew make; (iv) 06 T.T. bars of Credit Suisse make; (v) 02 T.T. bars of PAMP Suisse make; 18. The CBI filed the chargesheet on 31.05.2002 whereupon the charges were framed, trial was conducted, and all the three accused were convicted by the Trial Court as mentioned infra. However, the High Court acquitted the Accused Nos. 1 and 2 but convicted the appellant/Accused No. 3 in Criminal Appeal Nos. 581 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of this letter no inference can be drawn that the gold bars sold to M/s. Globe International were of the markings mentioned in the letter. 22. The Trial Court has also referred to the evidence of PW-32 (Ashok Kumar Jain) who was declared hostile. This witness gave a statement to the CBI about business relations between appellant/Accused No.3 and M/s. CN. However, he did not support the prosecution and in cross-examination he stated that he was compelled by the CBI to make such statement. Another important witness is PW-26 (Prakash Jain). However, he too was declared hostile. The Trial Court recorded that the entire evidence of these three hostile witnesses is conspicuously silent about the appellant/Accused No.3 and proceeded to infer that they did not want to support the prosecution. Basing on the evidence of hostile witnesses, the Trial Court concluded the following: "108. Conversion of money into gold bars itself brings accused no. 3 near to the offence. If conversion would have been into land or savings certificates then that would have been a remote circumstance. Accused No. 3 is a jeweller and his family is in the same profession. In the evidence of PW-21 Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Court is not proved as the same property which was sold by M/s. CN to M/s. Globe International. However, surprisingly, the trial court concluded that, the fact that the gold was sold through fraudulent demand drafts from M/s. CN to M/s. Globe International, it can be held that appellant/accused no. 3 has received stolen property with knowledge. It was held that gold bars found with him may be a stolen property or he might have handed over to the absconding accused Mukesh Shah or any other accused. It was also held that after receiving the stolen property, it may change the hands, so accused may not have entertained the property but the fact that he has received the property is proved beyond reasonable doubt. Therefore, the evidence brought forth by the prosecution is sufficient to hold that accused is guilty under Section 120B and 411 of the IPC. Significantly, the Trial Court observes in the same breath in the following words in Para 120: "120. However, the gold bars i.e. Article 2 may be or may not be the same gold bars which were sold by Chenajee Narsinghjee to Mr. Mukesh of Globe International. The distance between may and not is very vast and prosecution has to cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that basing above evidence and finding; notwithstanding the delay in seizure, the clause (a) of Section 114 of the Evidence Act will have to be invoked. 27. While dismissing Hiralal's appeal for return of seized gold bars to him, basing an ex-parte decree in his favour, the High Court reasoned that in the ex-parte decree the State was not a party and there is no proof that Hiralal has acquired the seized gold bars. The High Court, thus, dismissed the appeal preferred by the appellant/accused no. 3 as well as Hiralal while the appeal of the CBI against return of seized gold bars to the appellant/accused no. 3 has been allowed. 28. The circumstances considered by the courts below to sustain the appellant's conviction under Section 411 and 120B of the IPC can be summarised as follows: (i) CBI officials were resisted at the time of search and seizure in the appellant's jewellery shop; (ii) Letter issued by M/s. Chenaji Narsinghji to CBI (Exhibit-119) containing an endorsement in favour of the appellant; (iii) Gold purchased by utilizing demand drafts drawn on the account of M/s. Globe International was stolen property; (iv) The appellant have business relations with M/s. Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he destination of must, however, the prosecution in this case could not achieve that level of proof. With this finding of the Trial Court, it is surprising as to how the appellant can be convicted for committing offence under Sections 120B and 411 of the IPC. Once the courts below have found that the seized gold bars, (Article 2) are not the same gold bars, conviction under Sections 120B and 411 of the IPC cannot be sustained. 31. Similarly, the High Court impliedly held that witnesses connected with M/s CN have failed to identify the seized gold. However, in the opinion of the High Court, the same is not relevant because the appellant has failed to prove lawful acquisition of gold. We fail to understand, when the prosecution has failed to prove the identity of seized gold as being the same gold which were sold by M/s. CN to M/s. Globe International, how the appellant is liable to prove lawful acquisition of gold visà- vis the stolen gold. 32. In order to bring home the charge under Section 411 of the IPC, it is the duty of the prosecution to prove (i) that the stolen property was in the possession of the accused; (ii) that some persons other than the accused had possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shah and gold bars were purchased by the appellant from M/s. CN and M/s. V.B. Jewellers, still it was necessary for the prosecution to prove that the appellant either had knowledge or reason to believe that the demand drafts had been obtained through fraudulent process to make the gold bars as stolen property in the hands of the appellant or that the appellant was part of the conspiracy. Moreover, the appellant has not been charged and tried for the first part of the offence relating to criminal conspiracy vis-à-vis fraudulent TTs. 36. Yet another aspect of the case which needs consideration is invocation of Section 106 of the Evidence Act by the courts below. Under Section 106 of the Evidence Act if certain facts are established, a reasonable inference can be drawn regarding existence of certain other facts which are within the special knowledge of the accused. On this, we may profitably refer to this Court's judgment in "Nagendra Sah vs. State of Bihar" ( 2021 ) 10 SCC 725. "22. Thus, Section 106 of the Evidence Act will apply to those cases where the prosecution has succeeded in establishing the facts from which a reasonable inference can be drawn regarding the existe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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