| Headnote |
A B [2015] 1 S.C.R. 84 VINAYAK NARAYAN DEOSTHALI v. CENTRAL BUREAU OF INVESTIGATION (CriminalAppeal No. 335 of 2005) JANUARY 12, 2015 [SUDHANSUJYOTI MUKHOPADHAYA AND N.V. RAMANA,JJ.] Penal Code, 1860 - ss.4091120-B,403, 477-A/109 - c Prevention of Corruption Act, 1988 -s.13(2) rlw s.13(1)(d)- Securityscam -Prosecution of theappellant-accused (a Bankemployee)for hatchingcriminal conspiracywith the infamousshare-broker(Accused No. 3-Harshad Mehta) with the object of cheating the Bankand effectingillegal gain to 0 accused No. 3 - Convictionby SpecialCourt - On appeal, held: The appellant-accusedwas part of the conspiracy in facilitatingtrading of SGL (SubsidiaryGeneral1-edger) securities to thebenefit of accused No. 3 by abusinghis officialpositionand by violating provisions· of bankinglaws - E The prosecutionsuccessfullyproved the offences,beyond reasonable doubt through voluminous documentary evidence. Dismissingthe appeal,the Court HELD: 1.The procedure of .-Oa€11ing with F SGL(SubsidiaryGeneral Ledger) accounts as explained by PW1 and PW2 has not been followed in thecase of securities in question. The material on record unequivocally establishes that the wrong entry in the account of UCO Bank SGL Account No. 065 effectedto Gtheadvantage of HarshadMehta (AccusedNo. 3) had not occurred as a result of aninadvertenterror, but a planned misdeeddone with mala fide intention. The appellant accused, who is well acquainted with the banking activitiesand SGL transactions,created false documents H84 VINAYAK NARAYAN DEOSTHALI v. CENTRAL 85 BUREAU OF INVESTIGATION and acted contrary to the provisions and committed A illegal acts which are writ large on theface of record. Thus, the appellant was part of the conspiracy in facilitating trading of SGL securities to the benefit of accusedNo. 3 andin the process, abused his official position and violated provisions of banking laws.The 8 facts and circumstances of the case clearly show the participation of the appellant in the criminal actsand misuse of his official position. The prosecution has successfullyproved the nexusbetweenthe accused.The ingredients of the offences for which the accused is C charged has alsobeenestablishedbeyond all reasonable doubt by the prosecution by adducing voluminous documentaryevidence as well as oralevidence.[para 29 and 30] [98-E-H; 99-B-D] 2. The Telexmessagesdated 23.3.1991(Ext. 287) andD 6.4.1991(Ext. 466) reveal that UCO BankHead Office explicitly instructed for its own Account (032).The communicationdated 13th April, 1991 (Ext. 300) sentby theaccusedNos. 1 & 2 cannot be treatedas a simple mistake considering the consequential events. The preparation of thesaidcommunicationand alsothe entry relating to theSecuritiesin questionhas beenwrittenby theaccused No.1-appellant himself.The entryindicates E F to transfer the securities into the UCO Bank's Account No. 065 (Brokers' Account) together with two other entriesrelating to other securities which were actually meant for transferinto the UCO Bank'sAccountNo. 065. Therefore, it cannot be saidthat it was merelya clerical mistake that the Account No. 032 was struck off and Account No. 065 was retained by accused No.2.The inclusion of securities in question in the said G communicationby the appellant in his ownhandwriting, establishesthe factthatthe appellanthad willfully and with ulterior motive preparedthe communication.[para 27][97 -C-G] H 86 SUPREME COURT REPORTS [2015] 1 S.C.R. A 3. The transfer of an amount of Rs.2.00 crores from account No.065 to account No.032, without there being any transaction clearly shows that toget away with enquiries of the HeadOffice,the accusedhas chosen to transfer the money without therebeing any transaction 8 and exhibitsthe conduct of the accused. Almost all the documentspertaining to switch transactionare signedby him.[para28] [97-G-H;98-A-B] c D CRIMINAL APP ELLA TE JURISDICTION : CriminalAppeal No. 335 of 2005. Fromthe Judgmentand Order dated 03.12.2004 of the Special Court (Trial of offences relating totransactionin securities)at Bombay in Special Case No. 3 of1995. DhirajMirajkar,Kamini Jaiswal for theAppellant. VibhaDatta Makhija, T. A. Khan,Chetan Chawla, Disha Vaish, B. V. Balramdas, ArvindKumar Sharma for the Respondent. EThe Judgmentof theCourtwas delivered by N.V. RAMANA, J. 1. This appeal is directedagainst the judgmentdated 3rd December, 2004 of the SpecialCourt (Trial of offences relating to transactions in Securities) at Bombay in Special CaseNo. 3 of 1995wherebythe Special Judge Fconvicted and sentencedthe appellant for theoffencesunder Sections 409/120B,403, 477-A/109, IPC and Section13(2) readwith Section 13(1 )(d) of the Preventionof CorruptionAct. 1988. G 2. Theprosecutionstory, brieflystated, is that duringthe year1991,the appellant (accusedNo.1) while he wasworking asAssistantManager in the SecuritiesDepartmentof UCO Bank, Hamam Street Branch,Mumbai in connivancewith a colleague of theBank(accused No. 2) hatcheda criminal H conspiracywith the infamousshare & stockbrokerof Bombay VINAYAK NARAYAN DEOSTHALI v. CENTRAL 87 BUREAU OF INVESTIGATION [N.V. RAMANA, J.] of thosetimes,Harshad S. Mehta(accused No. 3) with theA objectof cheatingthe UCO Bank by causing wrongfulloss to theBankand effecting illegal gainto theaccusedNo. 3 (HarshadMehta). It is alleged that for achievingthe object of conspiracy,the appellant despite being a public servant, committed criminal breachof trustand misappropriatedthe B fundsof Bank by manipulatingthe accounts to facilitateunlawful gains to Harshad S. Mehta (accused No. 3). 3. Thebackground of the caseas unfolded by the prosecution is thatat the relevant time, UCO Bank had two Subsidiary General Ledger (SGL) accountswith the RBI. The C SGL is atype of SecuritiesAccount floated by the Central Government.For makingtransactions in these Securities, Banks and financial institutionshave to openthe SGL account withthe Public DebtOfficeof theReserveBank of India.UCO Bank has two such SGL accountswith the ReserveBank of D India.Out of the two SGL accountsowned by the UCO Bank, oneaccountwith the number 032 wasmeantfor theBank's HeadOffice's own transactionsand the other SGL account No. 065 wasmaintainedfor thetransactionsdone by constituents/ brokers.When the Bank itselfpurchased/sold a GovernmentE Security,the respectiveentry was to be made in account No. 032 and if the Security was purchased/sold by abroker client ofthe UCO Bank,the entrywas to be made in SGL account No. 065. As far as theentry in thebooksof RBI was concerned, it wasmadein a particular account according totheF instructionsgiven by UCO Bank for everytransaction, as both theaccountsstood in the nameof UCO Bank. 4. On 22ndMarch,1991 UCO Bank sold Securities namely, Governmentof India 11.5% 2009, worth Rs.20 crores G to Indian Bank(Ext. 250) from its SGL account No. 032 i.e. UCO Bank'sown account. On the sameday, UCO Bank purchased Securitiesnamely, Governmentof India 11.5% 2006, worth Rs.20 crores from Indian Bank (Ext. 425). 5. On 5th April, 1991 UCO Bankre-purchasedthe earlier H 88 SUPREME COURT REPORTS[2015] 1 S.C.R. A sold GOI 11.5% 2009 Securitiesfrom Indian Bank and sold GOI 11.5% 2006 Securitiespurchased earlier to Indian Bank. In other words, UCO Bankreversedthe earlier transactions.With theeffect of repurchase of Securitiesby the UCO Bank, RBI should have made the entry crediting the worth of those Bsecuritiesin SGL Account No. 032 of the UCO Bank. 6. Whereas,due to a communicationdated 13th April, 1991 (Ext. 300) signedby the appellant accused in hisposition asAssistantAccountantand the co-accused(not a partyin the C present appeal) requestingthe RBI to makeentry in SGl AccountNo. DV SL 065, the SGL AccountNo. 065 which was meantfor thebroker clients of the UCO Bankand whichhad no balance onthatdate,showedthe balance of Securitiesworth Rs.20 crores. At that point of time,the transactions of all other brokersstood squared off except in respect of accusedNo. 3 D(HarshadMehta). Taking this wrongentry to hisadvantage, accusedNo. 3-Harshad S. Mehta, being the broker/client of the UCO Bank, sold GOI Securities11.5% 2009, worth Rs.15 crores(Ext. 413),which actually did not belong to him,and thereby wrongfully gainedand the UCO Banksufferedthe loss. E It was noneotherbut the appellant-accused No.1, who passed the Debit & Credit vouchers pertaining to the transaction(Exts. 295, 296 & 297).Whenthese misdeeds came to light, theaccusedtook stepsand madeeffortsto cover F upthetransactions. 7. Whenthe SecuritiesScam broke out in the year 1992, a specialcell was established by the CBI to deal withthe cases arisingout of the scam. Accordingly, an FIR wasregisteredon 30th December,1993 againstthe accusedinvoking Sections G 120B read with Section409, 420, 468, 471,477-A, IPC and Section 13(2)read with Sec;tion 13(1)(d) of the P.C. Act, 1988 and the case was committed to the Special Court. The appellant wasarrestedon 12thMay,1997.The Special Judge, aftertaking overall view of the matter, held the appellantguilty of the offences and sentenced him to undergo rigorous H VINAYAK NARAYAN DEOSTHALI v. CENTRAL . 89 BUREAU OF INVESTIGATION [N.V. RAMANA, J.] imprisonmentfor a periodof oneyearand to pay an amountA of Rs.25,000/- towardsfine, in default thereof, to further undergo imprisonmentfor a periodof threemonths.The special judge, however, let theaccused appellant to be on bail for a period of 12 weeksto enable him to approachthe appellate Court. 8. Aggrievedby thejudgment of the Special Judge,the appellantfiled this appeal under Section 10 of the Special Court (Trial of Offences Relating toTransaction in Securities) Act,1992.That is how this appeal is before us. 9. Thoughthere are threeaccused in this case,we are concernedwith accused No. 1-appellant herein only. The other twoaccused namely MakrandVasant Shidhaye(accused No. 2) and Harshad S. Mehta(accused No. 3) are not parties in thepresent appeal. However,it ispertinent to mentionthat MakrandVasant Shidhaye(accused No. 2) had also preferred an appeal before this Courtagainstjudgmentof the Special Judgebeing CriminalAppeal No. 336 of 2005 whichwas listed beforethis Court on 11thNovember,2014 whenthe following orderwas passed: CriminalAppeal No. 336 of 2005 This appeal is listed againstthe commonimpugned judgment along with CriminalAppeal No. 335/2005.B c D E The learned counsel appearing on behalf of the appellant F isnotpresent. It is informed at Bar by the learnedcounsel for the appellant in CriminalAppeal No. 335/2005that MakrandVasant Shidhaye-appellant in CriminalAppeal No. 336/2005died G duringthe pendency of the appeal. In viewof suchfact broughtto ournotice,the appeal stands abatedand disposed of. So far as accused No.3 (Harshad S. Mehta) is H 90 SUPREMECOURT REPORTS [2015] 1 S.C.R. A concerned, he had died on 31stDecember, 2001 duringthe pendencyof trial. 10. On 21st February, 2005 whileadmittingthe appeal, this Court grantedinterim relief to the appellant by suspending 8sentence of imprisonment during pendencyof theappeal beforethis Court. 11. Learnedcounsel for theappellant-accusedsubmitted thatthe learnedSpecialJudge failed to appreciatethe evidencecorrectly and erred in holdingthe accusedguilty of C the offences.The SGL informationconcerning the securities re-purchased by the UCO Bank on 5th April,1991wasreceived on12thApril,1991. Since there used to be a numberof transactions by theclients/brokersand the re-purchased SGL informationwas receivedafter a gapof aboutone week,a o clerical and bonafide mistake was committed by the appellant-accused in gettingthe securitiescredited into the SGL account No. 065insteadof account No. 032of the UCO Bank.Therewas no participationby theaccused in any conspiracy to benefitaccused No. 3, HarshadMehta. It was Epurelya clericalerror that occurred in a casualway withoutany bad intention. In a normal way, theaccusedsigned the covering notedated13th April, 1991 also signed by accused No. 2 enablingthe RBI to creditthe securitiesinto SGL account No. 065. The accused-appellant had no ma/afide or dishonest Fintentionto commitany fraudor causeloss to the UCO Bank or to cheat it. Themistakehappenedmechanicallywithout the consciousinvolvementof theappellant. It is alsoevidentfrom therecordthat accused No. 2 himselfadmitted in his statement underSection313, Cr.P.C. that it was he whostruck off account No. 032 and wroteaccount No. 065 in the covering Gnote(Ext. 300). Thus,the appellantcannot be charged with a . severepunishmentfor a reasonableclerical mistake. 12.Learnedcounsel also submittedthat the appellantwas notconcernedwith the routinework of theHamamStreet HBranchof UCO Bank. He was speciallyentrustedthe duties VINAYAK NARAYAN DEOSTHALI v. CENTRAL 91 BUREAU OF INVESTIGATION [N.V. RAMANA,J.] of redemption and reconciliation of securities. While A dischargingthose duties,when the appellant noticed the mistake,he immediatelyfacilitated transfer of Rs. 2 croreson 15th July, 1991from the accountNo. 065to accountNo. 032 toset righUhe record.Learned Special J.udge, has failed to appreciatethe fact in a truespiritthat the SGL transferformsB (Ext.235 andExt.240)concerningthe securities sold by HarshadMehta to thetune of Rs.15croresfrom SGL account No.065,werenot signedby the appellant andthe appellant has no role in that transaction. This fact itself clearly establishesthat the appellant wasnot part of anyconspiracy C withaccusedNo. 3 (HarshadMehta). But the Special Judge tooka differentand wrongview and erredby holding that the appellant transferredsecurities worth Rs. 2 crores lying in the account No. 065 to account No. 032 to cover up the transaction.There was no evidenceon recordto establish a 0 link betweenthe accused-appellant and the accusedNo. 3 (HarshadMehta) forminga conspiracybetween them and the prosecutionhas utterly failed to provethis aspectand therefore, the appellant isentitledfor benefitof doubt. 13. Furthercontention of the learnedcounselis thattheE appellant was onlyan AssistantManager of the Bank a11d scrupulously implementing the decisions taken by his superiors. The appellant had only performedhis duties obediently for whichhe cannotbe madea scapegoatas if the appellant wassolelyresponsiblefor thetransactions.The F importantfactor, ignoredby thelearnedSpecial Judge while convictingthe appellant,is thatthe appellant had not earned anypecuniary gainsfor himself.The learnedtrial Judgeunder amisconceptionwent on believingthe prosecutioncase. Only for the simple reason of irregularity or negligence in G . _d!s~~g_guties, the appellant wasgivenharshpunishment of sentence·by the learnedSpecial Judge even thoughfactually no loss wascausedto the UCO Bank.The viewtakenby the learned.Special Judge that the acts of the appellant have exposed the UCO Bankto a gravefinancialloss is absolutelyH 92 SUPREME COURT REPORTS [2015) 1 S.C.R. A subtle andnot based on theevidence.The prosecutionhas alsoadmittedthat no loss wascaused to the UCO Bank. By any stretchof imagination,the actsof theappellantcannot be construedto labelagainst him 'criminalmisconduct'within the ambitof Preventionof Corruption Act, 1988. B 14.Disputingthe quantum of sentencealso, learned counselfor theappellantsubmittedthat the learnedSpecial Judgewhilesentencingthe appellantignored the elementof proportionality in imposingthe punishment.Learned Special Judgehas miserablyfailed to appreciatethe facts in their C properperspectiveand committeda graveerror in convicting theappellantand hencethe impugnedjudgment calls for interference by thisCourt. 15. On the otherhand,learnedSenior Counselappearing Dfor the C.B.I., whilesupportingthe judgmentof thelearned SpecialJudge, submittedthat the learnedSpecial Judge passedthe impugnedjudgment after undertakinga thorough trialprocedure. He came to the conclusiononly afterhaving satisfiedthat the guiltof theaccused has beenprovedbeyond Ereasonabledoubt. Hencethe TrialCourtcommitted no error in sentencingthe accused. 16.Shecontendedthat the accusedcannot plead innocenceas he played an active role in the conspiracy in benefittingaccused No. 3 (HarshadMehta). In the process, he Ftookthe benefitof being an employee· of the UCO Bank,fully acquaintedwith the SGLtransactions,and committedthe offencemisusinghis officialposition.The transferof 11.5% CGL 2009 securitiesfor a valuefor Rs.20croresinto the SGL account No. 065 in the PublicDebt Office of RBI effectedonly Gwiththe malignedintention of the accused-appellant in pursuanceof hisillegalobjectof providing wrongf'°I gainto accused No. 3(HarshadMehta). The conspiracyhatched by the accuseddeprived UCO Bank of the interestthat wouldhave accrued on thefacevalueof securitiesamounting to Rs.20 Hcrores.The illegalobjectand the roleplayed by_ the -accused VINAYAK b!ARAYAN DEOSTHALI v. CENTRAL 93 BUREAU OF INVESTIGATION [N.V. RAMANA, J.] with fullknowledge andintentionare established by a seriesA of transactionswhich formeda continuouschain and link of circumstances leading to the culpability of theaccused. 17.Learned counsel hasdrawnour attention to a Telex messagedated 23rd March, 1991 (Ext.287) sent by the UCO Bankfrom its HeadOffice to Zonal Officeinstructingfor effectingB theswitchtransaction in favour of UCO Bank HeadOffice Account (SGLAccountNo. 032). In spite of those clear instructions,the accused-appellant with a viewto benefitthe accused No. 3, effected the transfer of Securitiesinto the UCO C BankConstituents/BrokersAccount (Account No. 065). It is also evident from the recordthat at the relevant time, all brokers' transactionswere squaredoff exceptthat of accused No. 3 (HarshadMehta) who sold those wrongfully transferred securitiesfor hisownbenefit,causing loss to the UCO Bank. D 18. In pursuanceof achievementof illegal.object to cause wrongful gainto accused No. 3, the appellant, beinga public servant,abused his position to a greatextent.When the UCO Bank HeadOfficewas not informedabout the development of the switchtransactionwith referenceto their Telex messageE dated23rd March, 1991 (Ext. 287),whichtransactionwas admittedly being carriedby theaccused,the HeadOffice issuedanother Telex messagedated 6th April, 1991 (Ext. 466) inquiringabout the transaction.Despite this second Telex messagefrom the HeadOffice,the accuseddid notrespondF toinformthe HeadOffice immediately and it is only on 11th April, 1991 theaccusedsent a Telex message(Ext. 288) to the HeadOfficeinformingexecution of the transaction,that too concealing the truth.Another link exhibitingthe wrongintentions of the accused is thatthe BankReceipt(Ext. 299) dated5th G April, 1991issuedby Indian Bank was dischargeci by the appellant on 12th April, 1991 in favour of the UCO Bar ii< Head Officeby signing on thereverse of it. 19. Learnedsenior counsel further contendedthat it was only whenthe accusedcame to know that inquirieswere beingH 94 SUPREME COURT REPORTS [2015] 1 S.C.R. A carriedout by the UCO BankHeadOfficefor the loss occurred toit dueto non-credit of theinterest on the securities in question,the accusedin connivancewith eachotherin a planned mannertried to cover up thetransactions and credited UCO BankHeadOfficeaccountthrough four transactions. BThesetransactionsare: c D E (a) 15th July. 1991 Transferred GOI securities 11.5% 2009 worth Rs. 2croresfrom UCO Bank's SGL A/C No. BYSL 065 (Brokers'account) to SGL A/C No. 032 (UCO Bank's own account)(Ext. 245) (b) 21st October. 1991 Transferred GOI securities 11.5% 2009 worthRs.17croresfrom the accused No. 3's accountof State Bank of India to his State Bankof Saurashtra(Ext. 277)account. (c) 21st October. 1991Againtransferred GOI securities11.5% 2009 worth Rs.17croresfrom accused3's State Bank of Saurashtraaccount to UCO Bank's Account No. 065 (Ext.272). (d) 25th October. 1991 Finally these GOI securities 11.5% 2009 havebeentransferredfrom UCO Bank's Account No. 065 to its Account No. 032 (Ext.282). F20. To further assert her argumentthat the accusedin the processof effectingthose cover up transactions indulged in illegal acts, learned senior counselexplained that eventhough therewas no instructionfrom the UCO BankHeadOffice,the accused-appellant directedthe ReserveBank to transfer Gsecuritiesworth Rs.2 croresfrom Account No. 065 to Account No. 032 (coverup transaction'a' above) blatantly misusinghis position as apublicservant.. To prove the chainof conspiracy, learnedsenior counsel took us throughExt. 277 whichshows thatSecuritiesworth Rs.17croreswere transferredfrom State H Bankof India from the account belonging to accused No. 3 VINAYAK NARAYAN DEOSTHALI v. CENTRAL 95 BUREAU OF INVESTIGATION[N.V. RAMANA, J.] (Harshad Mehta) on 21stOctober,1991 to State Bank of A Saurashtra(another account belonging to HarshadMehta) and on the sameday theywereagaintransferredfrom State Bank ofSaurashtrato UCO Bank SGL Account No. 065 (Ext. 272) and then to UCO Bank SGL Account No. 032 on 25th October, 1991 (Ext.282) withoutany instructionsfrom the UCO BankB HeadOffice. In this way,the accused, in connivancewith each othertried to coverup the UCO BankHeadOfficeAccount. 21. Highlighting the cruciallink of theconspiracyamong theaccused in misusingthe fundsof UCO Bank to thetuneof Rs.20 crores, learned senior counsel submittedthat on 1st July, C 1991 accused No. 3 wrotea letter to the UCO Bank(Ext. 413) requestingto issue GOI 11.5% 2009 Securitiesworth Rs.15 croresto State Bank of Saurashtra and State Bank of Hyderabad,though these Securities in fact did not belong to him. Accordingly, Securitiesworth Rs.5 crores(Ext. 235) wereD transferredto the State Bankof Hyderabadfrom UCO Bank SGL Account No. 065, without any instructionfrom the UCO Bank.The Banker'scheque dated 1st July, 1991 (Ext. 678) receivedfrom State Bank of Hyderabad against those securities, in favour of UCO Bank for an amount of E Rs.5,07,195,62.22 (including interest)was creditedin the accountof accused No. 3 (HarshadMehta). Similarly, on the sameday i.e. 1st July, 1991 Securitiesworth Rs.10 crores (Ext. 240) were transferred to the State Bankof Saurashtrafrom UCO Bank's SGL Account No. 065, without any instructionfrom F UCO Bank. 22.The learned senior counselfinally submittedthat the offenceswith whichthe appellant was chargedhave been provedbeyond reasonable doubt and the Trial Courthad notG committedany error in convictingthe accused. She, therefore, prayedthat the impugnedjudgment does not deserveto be interferedwith. 23. Heard the counsel on either side at length and gone through the voluminous record placed before us. TheissuethatH 96 SUPREME COURT REPORTS [2015] 1 S.C.R. A falls for considerationis whetherthe learnedJudge of the SpecialCourt was rightin convictingthe accusedfor the offences he is chargedwith and whether the prosecutionproved theguiltof theaccusedbeyond reasonabledoubt? B24. Basing on the argumentof boththe parties,it appears thatit is the specificdefenceof theaccusedthat absolutely thereis nomotiveor intention on hispartin the alleged transactionsand if at all anythingis done,it is purelya clerical bonafide mistake.Absolutely, he has no ma/a fide intention to commitany fraudor crime.Havingnoticedthe irregularities C thathavetakenplace, he has taken steps to transfer an amount ofRs.2.00crores to the accountNo.032 from the account No.065.He is notinvolved in anyconspiracyor benefitedby thetransactions and thelearnedJudge has failed to appreciate theevidence in its properperspective and misguidedhimself D in convictingthe accused.Whereas, on behalf of the CBI, argumentswere advancedsupportingthe judgmentof the SpecialCourt. 25. The CBI has adducedvoluminousevidence to establish Etheguilt of theaccused.The wholeissue revolvesaround the factwhetherthe accusedhas got a role to play in theswitch transactionsaccount and whetherhe wasdischargingthe dutiesas a prudentman and is it a bonafide mistakeas he claims it to be. F 26. It appears fromthe recordand on a thorough examinationof theeventsthat tookplacebetweenApril 1991 and October 1991, we understandthat on 22nd March, 1991 on whichdate UCO Bank's11.5% 2009 securitieswith face valueof Rs. 20 croreswere sold to Indian Bank, UCO Bank Ghaspurchasedsimilar value of securitiesfrom Indian Bank viz., 11.5% 2006GOI Securitiesfor its SGL Account No. 032. On 5thApril, 1991 boththe abovetransactionswere reversed. Resultantly, UCO Bank'sAccount No. 032 should have got back theaforementionedsecurities, but thesamewas wrongfully H transferredinto UCO Bank's SGL Account No. 065. being VINAYAK NARAYANDEOSTHALI v. CENTRAL 97 BUREAU OF INVESTIGATION[N.V. RAMANA, J.] operatedby theBrokers.At thatpoint of time, all brokers'A transactionswho wereoperating UCO BankAccountNo. 065 got squared off exceptthat of accusedNo.3. Takingthis to his advantage, out of thesecufities lying in the UCO Bank's AccountNo. 062, Securities worthRs.15crore, have been sold by theaccusedNo. 3, though not belonging to him actually, toB the State Bank of Saurashtra and State Bank of Hyderabadand thebanker'scheque issued in discharge of those securities in favour of UCO Bank for an amount of Rs.5,07,195,62.22 (including interest)was credited in the account of accusedNo. 3(HarshadMehta). c 27.The Telex messagesdated 23.3.1991(Ext. 287) and 6.4.1991(Ext. 466) reveal that UCO BankHead Officeexplicitly instructad forswitchtransactionfor its ownAccount (032). The communicationdated 13th April, 1991 (Ext. 300) sent by the 0 accusedNos. 1 & 2 cannotbe treatedas a simple mistake consideringthe consequential events. We have givenour anxiousand thorough perusal to thesaidcommunication(Ext. 300) and foundthat the preparationof communicationand also the entry relating to the Securities in questionhas beenwritten bythe accused No.1-appellant herein himself. TheentryE indicatesto transferthe securitiesinto the UCO Bank'sAccount No. 065 (Brokers'Account) together with two otherentries relating to othersecuritieswhich were actually meantfor transfer intothe UCO Bank'sAccountNo. 065. We, therefore,cannot acceptthe plea of appellant that it was merely a clerical mistakeF thatthe AccountNo. 032 was struckoff andAccountNo. 065 was retainedby accusedNo.2. The inclusion of securities in question in the saidcommunicationby the appellant in hisown handwriting, establishes thefactthatthe appellant had willfully andwith ulterior motivepreparedthe communication. G 28. It was claimed bytheaccusedthat he hastransferred an amount of Rs.2.00 croresfrom account No.065 to account No.032, withoutthere beingany transactionwhich clearly shows thatto getawaywith enquiriesof theHead Office, the accused H 98 SUPREME COURT REPORTS [2015] 1 S.C.R. A haschosento transferthe moneywithoutthere beingany transactionand exhibitsthe conductof theaccused. All the documents relating to switchtransactionbetween the UCO Bank and Indian Bank were signed by the accused,being the responsible officerknowingpretty well that thesesecuritiesare Bpurchasedby theHeadOffice of UCO Bank,whichat any stretch of imaginationcannot be termedas a mistakeor oversight,and above all, the debitand creditvouchersfor transaction in questionwere passed by the accused. On 12-4- 1991,bank receipt of Indian Bank dt. 5-4-1991(Ex.299) was c dischargedand A 1 signed on thereverse of bankreceipt. Almostall the documentspertaining to switch transactionare signedby him. 29.Wehave also perusedthe depositionsof prosecution witnesses. PW1-S. Nagrajan,the personwho was working D in RBl'sPublic Debt Office at the relevant time, in his deposition explained howthe SGL accountsare maintained. PW2- HarsukhlalChhotalal Parekh, the erstwhile Manager of UCO Bank's Hamam ·street Branch asserted that when the transactionsare taken place over SGL accounts,necessary Einstructionsare received. by the SecuritiesDepartment of the Hamam Street Branchfrom concernedBroker. Admittedly, the procedureof dealing with SGL accounts as explained by PW1 and PW2has not been followed in thecase of securities in question.The material on record unequivocallyestablishes that Fthewrongentry in the account of UCO Bank SGL Account No. 065 effected to the advantageof HarshadMehta (Accused No. 3) was not occurredas a result of an inadvertenterror, but a planned misdeeddone with mala fide intention. G 30. Consideringthe whole scenario of thecase,there is no doubt in our mindsthat the accused,who is well acquainted withthe bankingactivities and SGL transactions,created false documents and actedcontrary to the provisions and committed illegal actswhich are writ large on the face of record. It hasbeen clearly recordedby the trial Courtthat accused No.1 has already H VINAYAK NARAYAN DEOSTHALI v. CENTRAL 99 BUREAU OF INVESTIGATION[N.V. RAMANA, J.] been convicted in two casesand two morecasesare pending. In onecase,he hasundergoneimprisonmentfor a periodof oneyearand in anothercase, imprisonmentfor a period of 9 months,which showsthe conduct of theaccused,though that isnotthebasisfor our conclusion. We are,therefore,of the consideredview that the appellant waspart of the conspiracy in facilitating trading of SGI., securitiesto thebenefit of accused No.3 (HarshadMehta) and in the process,abused his official positionand violated provisions of banking laws. The factsand circumstances of thecase clearly showthe participationof the appellant in the criminal actsand misuse of his official position. In our opinion,the prosecutionhas successfullyproved the nexusbetween the accused.The ingredients of the offences forwhichthe accused is chargedhas also been established beyond all reasonable doubtby theprosecutionby adducing voluminous documentaryevidence as well as oral evidence. 31.Forthe foregoingreasons, we do notfindany merit in the appealcalling for ourinterferencewith the impugned judgmentpassed by the learnedSpecial Judge. Consequently, the appeal fails and is dismissed accordingly. By thisCourt's orderdated21st February,2005 the substantivesentence of imprisonmentremained suspendedduring the pendency of appeal. Thesaidorder is hereby recalled. The appellant may be taken into custody forthwith to serve the period of imprisonment. Kalpana K. Tripathy Appeal dismissed A B c D E F |
